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Co-integration Test and Error Correction Model for Analyzing the Effect of Urbanization on Employment Structure

Lan Tan

Abstract



Urbanization can influence the employment structure. In this article, time series data from 1978 to 2011 in China is used to examine the dynamic impact process of urbanization on employment restructure. ADF test, Co – Integration test and Granger causality test are carried out, Co-Integration relationship model and Error Correction Model are established, and then impulse response analysis is conducted. The estimation results show that, this method is applicable. And due to the rigor of the analysis process, the results are more accurate and reliable when compared with traditional method.

Keywords


ADF test, Co – integration test, Error Correction Model, Granger causality test.

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