Research On Labor Share And Economic Growth

The “Middle-Income Trap” was first proposed by the World Bank in 《East Asian Economic Development Report》in 2006.It pointed out that the various contradictions which was accumulated in the rapid development began to highlight and outbreak.And these contradictions make it unable to continue to make it develop to a higher level of income.Eventually economic growth stalled.Since the country came into being,with the reform and opening-up policy implementation in 1978,China’s economy has achieved rapid development for forty years.It has become the most important phenomenon of economic in the world,and created a “Miracle of China”.China‘s GDP per capita exceeded 4382 dollars in 2010,and reached 7589 dollars in 2014.It is the symbol of that China is gradually moving from the middle to high income countries.But at the same time the economic growth began to slow down.All kinds of contradictions became more and more serious.The imbalance of income distribution led to serious structural contradictions.These problems have aroused widespread concern in the academic field.This paper is guided by the theory of Marx,and takes the "Middle-Income Trap" as the research object.It focuses on the analysis of relations between Labor Share and economic growth,and explores the conduction mechanism of labor income distribution influence on the economic growth.At the same time it finds the common points of adjustment about Labor Share,realizing the sustained economic growth and crossing the “Middle-Income Trap” from the double dimensions of supply side and demand side.This article constructs a theoretical model of the World Bank WDI data and Chinese statistical yearbook data.By using it,carries out comparative analysis and empirical research,explores the relationship between the Labor Share and GDP per capita from the perspective of crossing the "Middle-Income Trap",and tries to put forward suggestions for how to across the middle-income trap successfully in China.The empirical results show that the square of Labor Share has a negative and significant influence on GDP per capita.It indicates that the optimal Labor Share is existent.From the view of the Labor Share and the interaction of the six mechanisms,the effects of investment,consumption and foreign trade are not significant from the side of demand.The effects of human capital,technological progress and industrial structure are significant from the side of supply.From the situation of international group,the high income group,the best proportion of labor income is greater than the middle and high income group,which shows that with the increase of the income level,should be the corresponding increase in the proportion of labor income.Then this paper deeply analyzes the characteristics of the system which is decided by the Labor Share in China.And comes to a conclusion that the Labor Share showed a complex situation which was influenced by economic transition,but the income distribution should adhere to the oriented of labor theory of value.In this paper,the theory of economic growth is constantly developing and changing,which is the process of the continuous understanding of the core power of growth.Productivity determines production relations,and production relations have effect on productivity.So it is very important that how to keep the relationship between them.Rational distribution pattern should attach importance to labor in the economic growth,and should not advocate the capital determinism in the accumulation of physical capital.We should promote the supply side reform with human centered,emphasize the role of technological progress,and focus on human capital accumulation and industrial restructuring.