As domestic economic entered a new stage, the growth of labor productivity plays a decisive role in GDP growth during the 14th Five Year Plan. Therefore, it’s necessary to further analyze the growth of labor productivity in the period of economic transformation and explore its growth source. This paper extends the neoclassical growth model, and makes regression estimation and growth decomposition of labor productivity by using the data of various provinces and cities from 1998 to 2019. The main findings of this paper are as follows: Firstly, the results of OLS regression show that China’ s labor productivity has indeed experienced a “structural slowdown” during the transformation of industrial structure, but the results of decomposition show that this slowdown mainly happened in low labor productivity sectors and has a positive effect on high labor productivity sectors. Secondly, the results of regression and decomposition show that the promotion effect of export structure on labor productivity only occurs in the low quantile, and the overall effect is small. Thirdly, the capital output elasticity is larger during the transformation period of industrial structure, and capital deepening is still the biggest driving force for China’s labor productivity growth. Fourthly, the influence of the quantity and quality of education on labor productivity depends on the level of each other to a certain level. Presently, the expansion of education is still promoting for the growth of labor productivity. Lastly, during the transition period, the distribution of labor productivity is more concentrated, indicating that there is convergence of labor productivity among provinces. The decomposition results show that this is mainly caused by factor return. Based on the conclusion of empirical analysis, this paper holds that productive-service-oriented policy and guiding of the development of high -productivity manufacturing should be appreciated to alleviate the “pain” of economic. At the same time, the expansion of education, which takes into account the quantity and quality of education, will be more beneficial to the growth of labor productivity.
