Effect of Labor Cost and Industrial Structure on the Development Mode Transformation of China’s Industrial Economy

Based on the non-parametric DEA-Malmquist method, this paper estimates the total factor productivities of the 33 industrial sectors in China for 2002–2014. The proposed industrial restructuring measurement is based on total factor productivity rates. This paper utilizes panel data from Chinese industrial sectors and observes the effects of labor costs and industrial restructuring on economic growth approaches. The results show a clear effect of labor cost increases and industrial restructuring in promoting the transformation of economic growth modes. To transform the mode of China’s industrial economic development, improving labor quality, accumulating human capital, and industrial restructuring should be emphasized.