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Interregional Decomposition of Labor Productivity Differences in China, 1987-1997

29 Pages Posted: 18 Apr 2008  

Ling Yang

Xi'an Jiaotong University (XJTU)

Michael L. Lahr

Rutgers University

Date Written: April 4, 2008


The literature on regional disparities in China is both broad and deep. Nonetheless much of its focus has been on the effects of trade liberalization and national policies toward investment in interior provinces. Few pieces have examined whether the disparities might simply be due to differences in industry mix, final demand, or even interregional trade. Using multiregional input-output tables and disaggregated employment data, we decompose change in labor productivity growth for seven regions of China between 1987 and 1997 into five partial effects - changes in value added coefficients, direct labor requirements, aggregate production mix, interregional trade, and final demand. Subsequently we summarize the contributions to labor productivity of the different factors at the regional level. In this way, we present a new perspective for recent causes of China's interregional disparity in GDP per worker.

Keywords: Decomposition, input-output analysis, productivity, regional disparity, China

JEL Classification: C67, O40, R15

Suggested Citation

Yang, Ling and Lahr, Michael L., Interregional Decomposition of Labor Productivity Differences in China, 1987-1997 (April 4, 2008). Available at SSRN: or

Ling Yang

Xi'an Jiaotong University (XJTU) ( email )

26 Xianning W Rd.
Xi'an Jiao Tong University
Xi'an, Shaanxi 710049

Michael L. Lahr (Contact Author)

Rutgers University ( email )

EJ Bloustein School of Planning & Public Policy
33 Livingston Avenue
New Brunswick, NJ 08901-1982
United States
+01(848)932-2372 (Phone)


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