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      On the basis of family economics and the theory of time allocation, it can be proved that labor supply under labor surplus conditions is not limitless. Subject to the constraint of intrahousehold labor division, the supply curve takes on a special staircase form: with the increase in labor supply, the reservation wage of rural labor rises constantly by an increasing margin. The response of labor supply to wage is not continuous: labor supply will increase only when the wage rises to the new level of reservation wage; otherwise wage increases will not lead to the increase in labor supply. Corresponding to this special supply condition, the demand for industrial labor instead of agricultural income becomes the major driving force for wage increases. Survey data on 1,500 rural households in Gansu and Inner Mongolia bear out the above proposition. When labor demand expands while the slight raise of wage cannot bring corresponding increase in labor supply, labormarket clearing will not be realized for a long period of time. This reminds us that the coexistence of wage increases and supply shortage of rural labor may very likely derive from insufficient labor supply under labor surplus conditions. It does not necessarily imply the exhaustion of labor surplus and cannot prove the arrival of the Lewisian turning point. 




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