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House Price and "Labor Shortage" of Chinese Manufacture
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TitleHouse Price and "Labor Shortage" of Chinese Manufacture  
AuthorTong Jiadong; Liu Zhuqing  
OrganizationNankai Univesity; Tianjin Normal University 
Key Words Increasing House Price; Manufacturing Employment; Structural Mismatches; "Labor Shortage" 
Abstract Using the data of 286 Chinese cities, the paper examines the effects of house price increase on Chinese manufacture employment, in order to explain the reason of "labor shortage" in Chinese manufacture with a new perspective. The basic results show increasing house price significantly rises the labor demand in construction industry and "squeeze out" the labor in manufacture, which results in structural mismatches in the workforce. This paper also finds: (1)The negative effects of increasing house prices on Chinese manufacture's employment becomes more significant after the financial crisis; (2) The increasing house price especially reduces the employment low-skill labor in Chinese manufacture, with the largest effects concentrated among labor with poor education in non-stated manufacturing firms or labor-intensive manufacturing firms. Finally, this paper also examines how the increasing house price would affect the "labor shortage" of manufacture and find there exists two channels-wage competition effects and scale expansion effect. Therefore, it is shown that increasing house price will change the labor market faced by Chinese manufacture, which would be an important determinant of Chinese manufacture's development and upgrading. 
Serial NumberWP1260 
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