Impact of Wage on Labor Productivity in Chinese Construction Industry

In China, the construction industry is a labor-intense industry. The labor productivity heavily influences the development of the construction industry. Using the framework of VAR model, this paper studies the impact of wage on labor productivity in Chinese construction industry based on the data from 1984 to 2007 by exploiting ADF unitroot and Johansen co-integration test and impulse-function analysis model. The results have released that intensive wage input in three major units in construction industry, State-downed Units, Collective-owned Units, and other types of ownership, is responsible for labor productivity elevation the long run. This finding could become a fundamental make an effective strategy to promote the increasing productivity of China's construction.