Trade Liberalization and Labor Demand Elasticity - Empirical Research Based on Chinese Industry Panel Data

摘要

In this paper, based on the panel data of Chinese industry from 1997 to 2005 and fixed effect model, it researches the influence of trade liberalization on Chinese industrial labor demand elasticity.The results show that the trade liberalization index has a very significant impact on the labor demand elasticity, trade liberalization mainly has much effect on the labor demand elasticity through changing the substitution effect of labor force and other factors of production, whereas through changing the scale effect of product price elasticity of demand follows the second role, the research supports on the hypothesis that trade liberalization can increase the labor demand elasticity.