Has China run out of surplus labour?

Rebalancing and Sustaining Growth in China

“…See Tyers (forthcoming). 4 The timing of China's Lewis turning point is a subject of controversy, as suggested by the contrasts between the views expressed by Cai (2010), Garnaut (2010) and Golley and Meng (2011), which offer just a sampling of a substantial literature. There is, however, little doubt that the turning point is on its way, even if there is little agreement as to whether recent real wage rises suggest its presence.…”

“…This generally coincides with a slowdown in the rate of rural to urban migration and some acceleration in the rate of rise in real wagesthe 'turning point' of Lewis (1955). The ardent debate over the proximity of this turning point notwithstanding, the most carefully considered evidence suggests it could still be some way off (Cai 2010;Golley and Meng 2011). It is nonetheless true that demographic changes associated with China's One-Child Policy have accelerated it, and labour costs have indeed grown more sharply in recent years.…”

Wage Determination in China During the Reform Period

“…In the Harris-Todaro model, rural-urban migration is driven by expected income differentials, which in turn are a function of rural-urban wage differentials, urban unemployment, and marginal productivity in agriculture (rural wages). 9 For the case of China, Li et al (2012) note that wages are now rising in China, and several authors explicitly focus on the Lewis turning point (when a shortage of rural labor drives up wages): according to Zhang et al (2011) and Cai and Du (2011), China has reached or exceeded the Lewis turning point, whereas according to Golley and Meng (2011), Ge andDas andN'Diaye (2013), it has not. Knight et al (2011) have it both ways: simultaneous surplus labor in rural areas and rising rural migrant wages in urban areas.…”

Reconstructing the Savings Glut: The Global Implications of Asian Excess Saving

“…The timing of China's Lewis turning point is a subject of controversy, as suggested by the contrasts between the views expressed by: Cai (2010), Garnaut (2010) and Golley and Meng (2011), which offer just a sampling of a substantial literature. There is, however, little doubt that the turning point is on its way, even if there is no agreement as to whether recent real wage rises suggest its presence.…”