Why the Lewis turning point debate in China remains unsettled: a regional CES-based reassessment

This paper re-examines whether, and in which regions, China has reached the Lewis turning point (LTP) by incorporating a regional framework with a CES-based indicator of labour scarcity. Using a county-level panel (2000–2020), we estimate a CES production function and obtain the marginal product of labour (MPL) in order to measure the extent of agricultural commercialization. This measure is benchmarked against a subsistence-wage proxy (SW) based on the minimum living standard (MLS). Our results show strong heterogeneity across and within regions. Commercialization in the eastern region largely meets the condition of the turning point, while the central and western regions, on average, are still below the benchmark. Moreover, there is considerable within-region variation, which suggests that aggregate assessments can mask key spatial differences in labour market tightness. The estimated elasticity of substitution also deviates from the conventional Cobb-Douglas assumption, and offers a structural explanation for the mixed evidence in previous research. Overall, these results point to the importance of transparent benchmarks and disaggregated, subnational analysis when diagnosing labour scarcity and crafting region-specific policy responses.