Impact of Migrant Workers on Total Factor Productivity in Chinese Construction Industry

Abstract

Total factor productivity (TFP) is of critical importance to the sustainable development of construction industry. This paper presents an analysis on the impact of migrant workers on TFP in Chinese construction sector. Interestingly, Solow Residual Approach is applied to conduct the analysis through comparing two scenarios, namely the scenario without considering migrant workers (Scenario A) and the scenario with including migrant workers (Scenario B). The data are collected from the China Statistical Yearbook on Construction and Chinese Annual Report on Migrant Workers for the period of 2008–2015. The results indicate that migrant workers have a significant impact on TFP, during the surveyed period they improved TFP by 10.42% in total and promoted the annual average TFP growth by 0.96%. Hence, it can be seen that the impact of migrant workers on TFP is very significant, whilst the main reason for such impact is believed to be the improvement of migrant workers’ quality obtained mainly throughout learning by doing.

Total factor productivity growth and its contribution: lessons from the Chinese construction industry pre- and post-2008 financial crisis

“…Compared with TFP, other drivers (e.g. labor and capital) are deemed as unsustainable drivers due to the law of diminishing marginal utility (Reijnders, 2018; Ye et al , 2019). On the contrary, TFP is a sustainable growth driver.…”

“…On the contrary, TFP is a sustainable growth driver. Because the growth driven by TFPG and TFPGC depends almost on technological progress (Liu et al , 2016; Magdalena and Malcolm, 2017), where the marginal utility tends to increase rather than diminish (Wang et al , 2020; Ye et al , 2019). Due to this reason, for any country, industry or even company, TFPG and TFPGC are broadly viewed as vital determinants in seeking themselves competitive advantage (Kapelko and Oude Lansink, 2015; Liu et al , 2016; Ye et al , 2018).…”

“…Since the financial crisis hit China at the end of 2008 (Ma, 2018), the total number of construction enterprises has been increasing (Wang et al , 2018b), which means few firms fail to survive in a challenging economy. Moreover, recent studies indicated that TFP in the industry achieved significant growth after the crisis (Tan et al , 2015; Ye et al , 2018, 2019). Compared with aforementioned countries that did not cope well with the recession, it seems that some effective survival lessons had been waiting to be mined and revealed in the Chinese construction industry, particularly in promoting TFPG and TFPGC.…”

Influence of agglomeration and selection effects on the Chinese construction industry

“…More specifics of the DEA-Malmquist model and the nested model can be found in Appendix 1. (Chancellor and Lu, 2016;Hu and Liu, 2018;Ye et al, 2019). Capital is expressed as the net value of fixed assets of construction enterprises, and labour is expressed as the average employment of the construction (sub)industry.…”

“…Capital is expressed as the net value of fixed assets of construction enterprises, and labour is expressed as the average employment of the construction (sub)industry. The output indicators are the total profit generated by the construction industry (Kapelko and Abbott, 2017;Zhang et al, 2018), its total value added (Chancellor and Lu, 2016;Ye et al, 2019), the total output value of the construction industry (Dan et al, 2015) and the carbon dioxide (CO 2 ) emissions ('carbon emissions') as an undesired output (Yeh et al, 2010;Zhang and Choi, 2013).…”