The Lewis turning point of Chinese economy: Comparison with Japanese experience

In this article, we estimate production function and calculate surplus labor in agriculture. The estimation results revealed that the Lewis turning point (LTP) was not yet passed in China. This study is also made in comparison with Japanese historical experience. The main contents are as follows. First, we survey the recent change in the urban labor market by using unemployment rate as an index to express the balance of labor demand and labor supply, and wage differentials between agriculture and urban industries with high productivity and high wages. Second, we estimate agricultural production function and calculate the marginal productivity of labor and surplus labor in order to demarcate LTP. Third, we reveal factors for the change in agricultural labor by referring to a growth in urban industry and argue on the role of rural industries in absorbing surplus labor. Finally, we refer to several important issues which are left for future studies.