Lewis growth model and China's industrialization

Nazrul Islam, Kazuhiko Yokota

Research output: Contribution to journalArticle

24 Citations (Scopus)

Abstract

This paper examines China's industrialization in the light of the Lewis growth model. It begins with a perusal of Lewis's own writings and those of Fei and Ranis to clarify certain assumptions and predictions of the Lewis model. The paper then reviews previous applications of the Lewis model in studying industrialization of other countries, and notes the methodological problems that arise in this regard. In applying the Lewis model to study China's industrialization, the paper focuses on the dynamic relationship between wage and marginal product of labor in the traditional sector. For this purpose, the paper estimates a production function for China's agricultural sector using province level data and compares the estimated marginal product of labor with the corresponding wage of the sector. The results show that the marginal product has been increasing (from below) at a faster pace than the wage, as is predicted by the Lewis model. The results indicate that China as a whole is steadily moving toward the Lewis Turning Point.

Original languageEnglish
Pages (from-to)359-396
Number of pages38
JournalAsian Economic Journal
Volume22
Issue number4
DOIs
Publication statusPublished - 2008 Dec 24

Keywords

  • China
  • Development
  • Duality
  • Lewis model
  • Wage curve

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Development

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