The Factors Influencing the Employment of Producer Services—From the Perspectives of Demand and Supply

There exist strong direct and indirect employment contributions in producer services, which have become an important way to solve the employment problems in developed countries. In contrast, the overall employment ratio of producer services is low in China. It is important and necessary to study the influencing factors of producer services employment in order to fully explore the employment growth potential of producer services and promote the solution of current structural employment difficulties in China. This paper analyzes the conditions, under which the development of producer services drive the employment growth from the perspectives of demand and supply. The theoretical model of the influencing factors of producer services employment is constructed and the empirical method is adopted to measure the influencing effects of these factors. It is helpful for policy makers to grasp the key of producer services employment at the implementation level, so as to more actively and effectively defuse the negative impacts of economic recessions on the employment and alleviate the current employment pressures in China.


Introduction
With the rapid development of service industry on a global scale, some developed countries have entered the era of service economy. One of the obvious trends is that the proportion of consumer services is decreasing and the proportion of producer services is increasing. The growth rate is not only higher than the average growth rate of the service industry, but also much higher than the average growth rate of the national economy. Producer services are dependent on the manufacturing industry. With intellectual capital and human capital as the main inputs, they can greatly reduce transaction costs, effectively transfer technology and professional knowledge, and significantly improve the efficiencies of productions and services, which play a powerful role in promoting modern economic growth. With the rapid expansion of its total amount and continuous optimization of its structure, the potential of producer services to promote employment has been fully released. At present, producer services have become one of the most important forces to solve the employment problems in developed countries. Some developing countries also give play to their advantages of backwardness and take the adjustment of the service sector, especially the development of producer services, as the focus of improving the core competitiveness of the industry and promoting employment.
There exist strong direct and indirect employment contributions in producer services, as well as strong employment growth potential [1]. The source of employment growth is industrial development, and the demand growth for labor is derived from the demand growth for producer-service products and the development of producer services. Compared with developed countries, the overall level of producer services in China is relatively backward, and the effective demand for producer services is insufficient. There are many obstacles to transform the huge potential demand into real demand. The market supply influences the development of producer services and the supply of jobs by guiding the demand. The problem of the demand naturally passes to the supply. The lack of effective demand and supply of producer services restrict producer services to play a role in stimulating employment. In order to fully explore the employment growth potential of producer services, it is important and necessary to study the influencing factors of producer services employment.
The main contribution of this paper is to analyze the influencing factors of producer services' development and employment growth from the perspectives of demand and supply, explore the conditions that drive employment growth, construct the factors model that affects producer services' employment, and measure the influencing effects of these factors by empirical methods. It is helpful for policy makers to grasp the key of producer services employment at the implementation level, so as to more actively and effectively defuse the negative impacts of economic recessions on the employment in China.

Literature Review
Aimed at the employment absorption effects, Kuznets (1960) found through empirical research that the employment effects of the tertiary industry were very significant [2]. Beyers (1999) showed that from 1977 to 1996, the employment growth of producer services in the United States and Canada was twice and 3.7 times that of the overall employment growth, contributing to the new employment by 1/4 and 1/3 respectively, making it the sector with the strongest em-H. Jia et al. American Journal of Industrial and Business Management ployment absorption capacity [3]. Juleff and Walker (1999) studied the employment structure of producer services in the UK using the data from 1971 to 1989, and found that the employment of the primary and secondary industries declined in absolute terms, while the employment of the service industry increased, among which the employment of producer services increased more than 3 times that of other services [4].
Aimed at factors influencing the employment of producer services, Bishop (2009) argued that knowledge spillover was an important factor affecting the employment absorption of producer services [5]. Lu Liwei (2010) analyzed the employment absorption capacity of producer services in the Yangtze River Delta Region, and found that the improvement of the employment absorption capacity of producer services should be achieved by adjusting the layout of producer services, promoting service trade and outsourcing, and establishing multi-level development coordination mechanism between enterprises and governments [6].
Taking Beijing as an example, Che Fang and Che Guangji (2012) conducted an analysis by using the panel data model and found that the urbanization level had the greatest impact on the employment in producer services, followed by the investment level and technical progress, and the wage level had the lowest impact [7]. Zeng Shihong and Ma Ming (2013) studied the factors influencing the employment absorption capacity of producer services under the background of China's high economic growth, and found that the proportion of state-owned enterprises in producer services and industrial wage level hindered the employment absorption of producer services [8]. Zhang Yanji et al. (2017) studied the spatial agglomeration and influencing factors of producer services in Beijing, and found that the enterprises and employment of high-end producer services were highly clustered on a small scale, while on a large scale, the ranking of industry agglomeration degree of enterprises and employment was not consistent [9]. The research of Li Lianshui et al. (2018) showed that "Internet+" could promote the employment of producer services when controlling such variables as industrial structures, capital inputs, local barriers, economic development level and environmental regulations [10].
In addition, many scholars have explored the reasons for the lagging development of producer services from the perspective of demand. Lv Zheng et al. (2006) held that the lack of effective demand for producer services was caused by the backward mode of industrial production in China [11]. Gao Chuansheng et al. (2007) found that the international OEM model of China's industry and the lack of upgrading incentives for industrial enterprises also limited the demand for relevant producer services to a certain extent [12]. Li Jiangfan (2005) summarized the factors affecting the demand for producer services as economic systems, the degree of specialization, enterprises property rights systems, the intensity of competition, the service quality of service enterprises, the prices of service, the economic development level and the degree of economic openness [13]. Therefore, based on the economic and social background of China's service industry development, this paper fully considers the potential demand for producer services to transform into real demand. Meanwhile, from the perspectives of demand and supply, the theoretical model of the influencing factors of producer services employment is constructed, and the empirical method is adopted to measure the influencing effects of these factors. It is helpful to fill the research gap in this field and promote the solution of the current employment problems.

The Influencing Factors of Producer Services Employment from the Perspective of Demand
According to the theory of market economy, the market demand is the core of industrial development. The increase in demand for labor is due to the increase in demand for producer services. At present, China has a huge potential demand for producer services, but it is difficult to transform the potential demand into the real demand. The restrictive factors mainly come from four aspects, including economic development mode, institutional factors, market mechanism, and related policies and regulations. the other hand, market price mechanism is difficult to play its role. The low quantity, poor quality and high price of services greatly inhibit the potential demand for producer services from being transformed into the real demand, making it unable to exert its effects of driving employment growth. 3

) The Market Mechanism Prevents the Potential Demand From Trans-
forming into the Real Demand. At present, Chinese producer services market remains strong market mechanism barriers, such as disorderly competitions, lack of standards, norms and integrity mechanisms, resulting in high market transaction costs. The difficulty of transforming the potential demand into the real demand greatly restricts the creation of jobs in producer services. A sound credit system environment is crucial to the development of producer services.
The current market integrity mechanism is far from being established, which makes the transaction costs of producer services increase substantially. The lack of market integrity leads to the lack of high-end service products, the difficulty in standardized operations of the market, and the information asymmetry be- ter the scope of value-added tax is expanded, enterprises' income tax tends to be directly preferential and has no obvious guidance, and individual income tax lacks encouragement for human capital investment. Secondly, there is a lack of industrial support policies related to producer services, which are insufficient to guide and stimulate the demand for producer services, which restricts their own development and employment growth. Especially in China, there is not enough guidance and support for the brand building of the service industry, especially producer services with high output efficiency, and there is a lack of relevant supporting policies for the cultivation of "Model Producer Services Enterprises", and the relevant work is still weak, which constrains their own development and employment.

The Influencing Factors of Producer Services Employment from the Perspective of Supply
The

Empirical Analysis
The factors restricting the development and employment of producer services in China are analyzed from the perspectives of demand and supply respectively.
However, whether the influence of these factors is significant, which influencing factors are positive and which influencing factors are negative, all need to be evaluated by the empirical test. Hence, the theoretical model and the econometric model are constructed to carry out empirical analysis.

Theoretical Model
The

1) The Representative Indicator of Economic Development Pattern This paper
uses" the ratio between the added value of the service industry and the secondary industry", which is highly recognized internationally, to represent the structural characteristics of Chinese economy. Furthermore, there is a significant and stable positive correlation between the employment proportion of the service industry and GDP per capita, namely, the employment proportion of the service industry gradually increases with the increase of GDP per capita [15]. In this paper, "GDP per capita" is selected as the representative indicator of the economic development level.
2) Representative Indicator of Institutional Factors This paper uses "trade dependence" and "foreign capital dependence", two highly recognized indicators of the economic openness, to measure and analyze the influence of institutional factors on producer services employment. ing. This paper uses the "urbanization rate" to measure and analyze the impact of policy factors on producer services employment.

5) Representative Indicator of Technical Progress Technical progress can be
divided into labor-saving, capital-saving and neutral technical progress. Labor-saving type will generate employment crowding out effect, while capital-saving type will generate employment promotion. Since it is impossible to separate the two factors, this paper chooses two indicators, "labor productivity" and "capital production ratio" of service industry, to measure the factors of technical progress.

Econometric Model
The multiple-linear regression model is most commonly used in the analysis of influencing factors. In the study of practical problems, the change of dependent variables is affected by multiple factors, so it is necessary to use multiple influencing factors as independent variables to explain the change of the dependent variable and establish a multiple regression model. If let the employment of producer services be Y, the independent variables determined by the above analysis are X 1 , X 2 , ... X 8 , as shown in Table 1, the model is constructed as follows: H. Jia et al.  β is the influence effect of each unit X 1 increase on Y when other independent variables are fixed, namely, the partial regression coefficient of X 1 on Y.

Data Description
The data are derived from China Statistical Yearbook (2000)(2001)(2002)(2003)(2004)(2005)(2006)(2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014)(2015)(2016)(2017)(2018) published by the National Bureau of Statistics. According to National Economy Industry Classification (GB/T 4754-2017) and Statistical Classification of Producer Services (2019), the classification of producer services include the provision of R&D and other technical services for production activities, cargo transportation, general aviation production, warehousing, postal service and express delivery services, information services, financial services, energy saving and environmental protection services, productive rental service, business services, human resources management, education and vocational training services, wholesale and trade brokerage services, production support services. According to the research objectives established and to be achieved, the Service Industry Statistical Reporting System of the national bureau of statistics is referenced. It is found that there is no relationship between the number of urban non-private sector employees and the number of urban private sector employees. Therefore, this paper added them together as the number of people employed in producer services.
In order to make the research feasible, the data are standardized in this paper. Fourthly, the data used in this paper do not include Hong Kong, Macao and Taiwan.

Empirical Test
1) Logarithmic Processing of Data The units of variable value vary greatly, and heteroscedasticity may exist. In order to avoid this problem, the logarithmic processing of all variable data is carried out and the estimated equation is:  Table 2.
In multiple-linear regression analysis, how many explanatory variables should be introduced into the model was studied. As shown in Table 2 3) Multiple Regression Analysis Eviews10.0 was used to evaluate and solve the multiple-regression model. Stepwise Least Squares strategy was adopted as the regression method, and the results are shown in Table 3.
The regression expression can be obtained from the operation results in    Figure 2. The microscopic scatter diagram shows that the absolute value of residual sequence has no obvious variation rule and its distribution is relatively random, so it can be preliminarily judged that heteroscedasticity does not exist.
Secondly, the "Heteroskedasticity Test: White" was applied to further test the existence of heteroscedasticity. As shown in Table 4, the White statistic (Obs* r-squared) is 25.3316, and its associated probability Chi-square (18) is 0.4518, greater than 0.05. Therefore, the original hypothesis is accepted at the significance level of 5%, indicating that there is no heteroscedasticity in this model.

Interpretation of the Result
In give full play to the compensation effects of technical progress driving employment growth. Secondly, the degree of openness measured by trade dependence has a negative influence on producer services employment. Increased trade dependence brings up crowding out effects on producer services employment, fully shows that China's producer services are mainly inward-oriented in driving employment. Finally, the increase of government expenditure, which is influenced by the market mechanism, leads to the decrease of the employment of producer services. Therefore, the government should moderately reduce the investment intensity and reduce the degree of intervention in the market. It is necessary to separate government and enterprises, government capitals and government affairs, reduce administrative monopoly as much as possible, and introduce market mechanism into non-natural monopoly business departments, which can greatly reduce the negative influences on the employment of producer services.
The government should relax the administrative control of the factor markets, such as the control of wages and the price of capital factors. It is necessary to fully let the market mechanism play its role, which can greatly enhance the ability of enterprises to independently determine factor prices and promote the normal play of the labor market mechanism.