  The expression "wage transition" refers to the fact that over the past two or
three decades in all developed economies wage increases have levelled off.
There has been a widening divergence and decoupling between wages on the one
hand and GDP per capita on the other hand. Yet, in China wages and GDP per
capita climbed in sync (at least up to now). In the first part of the paper we
present comparative statistical evidence which measures the extent of the wage
transition effect. In a second part we consider the reasons of this phenomenon,
in particular we explain how the transfers of labor from low productivity
sectors (such as agriculture) to high productivity sectors (such as
manufacturing) are the driver of productivity growth, particularly through
their synergetic effects. Although rural flight represents only one of these
effects, it is certainly the most visible because of the geographical
relocation that it implies; it is also the most well-defined statistically.
Moreover, it will be seen that it is a good indicator of the overall
productivity and attractivity of the non-agricultural sector. Because this
model accounts fairly well for the observed evolution in industrialized
countries, we use it to predict the rate of Chinese economic growth in the
coming decades. Our forecast for the average annual growth of real wages ranges
from 4% to 6% depending on how well China will control the development of its
healthcare industry.
