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Calculation and Cause Analysis of Hidden Unemployment—A Case Study of the Northeast State-Owned Forest Areas in China

Author

Listed:
  • Chen Wang

    (School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China)

  • Juanjuan Cao

    (Commercial College, Shanghai DianJi University, Shanghai 201306, China
    Beijing Key Laboratory of Study on Sci-Tech Strategy for Urban Green Development, School of Economics and Resource Management, Beijing Normal University, Beijing 100875, China)

  • Jing Wen

    (School of Applied Economics, Renmin University of China, Beijing 100872, China)

Abstract

The Northeast State-owned Forest Areas comprise the largest region of resources in China. The transformation of the Northeast State-owned Forest Areas is due to various stimuli, such as policies, systems, and markets. In the context of ecological construction and the reform of the state-owned forest system in Northeast China, these have undergone a transformation in terms of economy, society, and ecology. However, a mismatch persists between employment and industrial structures, leading to hidden unemployment. This study employs the framework of hidden unemployment theory, utilizing the Cobb–Douglas production function to quantify the hidden unemployment rate, revealing the relationship between transformation and hidden unemployment. Through this analysis, the underlying causes of hidden unemployment in Northeast China’s state-owned forest regions are scrutinized. There is a bidirectional causal relationship between ecological transformation and hidden unemployment, while there is a unidirectional causal relationship between economic transformation and hidden unemployment. Variance decomposition analysis highlights the substantial contribution of social transformation, followed by economic transformation, with ecological transformation playing a comparatively smaller role. Based on the above research, this article proposes expediting the reforms within the forest industry groups, facilitating the separation of governmental and corporate interests. Additionally, it advocates for strategic forestry development planning to effectively absorb surplus labor, and proposes three policy directives aimed at supporting forest area employees, including provisions for job transfers and reemployment opportunities.

Suggested Citation

  • Chen Wang & Juanjuan Cao & Jing Wen, 2024. "Calculation and Cause Analysis of Hidden Unemployment—A Case Study of the Northeast State-Owned Forest Areas in China," Sustainability, MDPI, vol. 16(5), pages 1-19, March.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:5:p:2068-:d:1349900
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    References listed on IDEAS

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    4. Dipak Mazumdar, 1959. "The Marginal Productivity Theory of Wages and Disguised Unemployment," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 26(3), pages 190-197.
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