A Study of the Decomposition of China's Industrial labor Productivity and Its Effects on Regional Disparity

This paper makes use of the nonparametric production frontier method to decompose China's industrial labor productivity growth from 1978 to 2007 into four components,i.e.the contributions of changes of efficiency,changes of technology,changes of physical capital and changes of human capital.Then it adopts the variance decomposition method to estimate the contributions of different regions to the differences in the growth of regional industrial labor productivity.Finally the kernel density distribution approach is used to analyze the influence of the above-mentioned four parts on the disparities of industrial labor productivity and the influence of the three industries on the disparities of regional income.The results indicate that(1) physical capital accumulation is one of the major drivers of regional industrial labor productivity growth and regional disparity,while the contribution of human capital accumulation is comparatively small;(2) the contribution of efficiency to industrial labor productivity growth is relatively small,however,it is an important reason for the regional disparity in industrial labor productivity;(3) technology is a non-neutral element,and the technological advances mainly occurred in high efficient capital regions;(4) during 1978-1992,the regional income disparity mainly comes from the growth disparity of agricultural labor productivity,while during 1992-2007,it mainly comes from the growth disparity of industrial labor productivity.