Core Viewpoint - Labor supply elasticity measures the responsiveness of labor supply to changes in wage rates, serving as an important indicator for understanding economic changes in a country, impacting consumption, labor, and various sectors [1][2] Labor Supply Elasticity Analysis - The analysis divides labor supply elasticity into national and urban scopes, with national elasticity calculated from total labor compensation and employment numbers, while urban elasticity considers published urban working hours and estimated rural working hours [1][2] - China's national labor supply elasticity is estimated at 0.06, while urban elasticity post-urbanization is 0.2, both lower than several OECD countries (Canada 0.38, Netherlands 0.25, USA 0.28) [1][2][10] Labor Time - Labor input is defined as the product of the number of workers and labor hours, with labor compensation being the product of labor hours and average wages, highlighting the distinction between labor time and labor wages [3] - The average working hours in urban areas have been increasing due to a rising proportion of urban employment, projected to reach 42 hours per week by 2024 [4] Labor Participation - The influx of rural surplus labor into cities since 1978 has led to a significant increase in urban employment, impacting wage pricing and labor-leisure choices [5] - The study measures labor supply elasticity using employment participation rates, comparing total employment with the economically active population [5] Labor Wages - Data sources for labor wages include national labor compensation ratios and average wages for urban employment, with adjustments made for missing data prior to 2008 [6][7] - The analysis finds that nominal and real wages for urban employees have shown consistent trends, with urban average wages growing faster than national averages from 2000 to 2012, but slower thereafter [9] High Labor Supply Characteristics - China's labor supply elasticity is influenced minimally by non-labor income, primarily driven by wage increases leading to longer working hours, reflecting a low marginal propensity to consume [10] - The low labor supply elasticity is attributed to various factors, including low property income, limited labor market flexibility, and the impact of minimum wage policies [10][11]

Labor Supply Elasticity - China's overall labor supply elasticity is estimated at 0.06, while urban labor supply elasticity is 0.2, both lower than several OECD countries (Canada 0.38, Netherlands 0.25, USA 0.28) [2] - The low labor supply elasticity indicates that tax cuts may not effectively stimulate consumption, suggesting a need to increase residents' property income to address the "high labor supply - low consumption tendency" [2] Labor Characteristics - The average weekly working hours for urban employees in China exceed 44 hours, which is above the legal limit of 40 hours per week [37] - The high labor supply characteristic aligns with a low marginal propensity to consume, indicating a preference for labor over leisure among residents [38] Economic Implications - The low elasticity of labor supply complicates macroeconomic adjustments, as it limits the effectiveness of government tax cuts aimed at stimulating the economy [38] - The government’s ability to manage economic downturns is hindered by the low labor supply elasticity, which restricts options for wage adjustments during economic crises [38]