Study On The Trend And Influeneing Factors Of China’s Labor Income Share

Since the reform and opening up, China’s economy has achieved a rapiddevelopment. The average annual growth rate of GDP is about9.7%. However, theshare of labor income in GDP is not improved at the growth rate of GDP. In thedifferent national income distribution subjects, the laborer does not fully enjoy thebenefits of economic growth. According to statistical data, since1995, the share oflabor income decreased year by year, which was dropped from51.44%in1995to39.74%in2007. At present, the global economy is not yet fully recovered andinternational consumer market is fatigued and weak and the voice of transformingeconomic growth mode in China is increasingly strong. Our country has already can’tcontinue to rely on exports and high investment to stimulate economic growth. Theexpansion of domestic demand, especially the improvement of residents’ consumptiondemand is crucial to economic growth. Therefore, it is important to analyze the trendand influence factors of the share of China’s labor income, in order to promote the shareof labor income rise have important sense.Based on the theory of factor income distribution, this article studies thecharacteristics and its influence factors of the share of labor income in China sincereform and opening up. The structure of the paper is as followed:To the characteristics and its influence factors of the share of labor income inChina since reform and opening up, at first this article have made an empiricallyresearch and analyses. The result shows that, the trend of the share of labor income inChina has stage characteristics:1978-1985, quickly rise;1986-1995, relatively smoothlychange;1996-2007, significantly drops; since2007, short rise.Secondly, according to the declining trend of the share of labor income, this paperhas made a comprehensive research about influence factors of labor income sharethrough literature research methods. This paper focuses on the influence of capitaldeepening, technological progress, labor market structure, industrial structure andglobalization. On this basis, according to the theoretical analysis, this paper makes anempirical analysis on the influence factor using some corresponding index. Theempirical results show that, capital output ratio, industrial structure adjustment, theability of trade union and the process of globalization have significant influence on theshare of labor income in China. Capital deepening, the ability of trade union and process of globalization have negative impact on the share of labor income in China, butindustrial structure adjustment has a positive impact; other factors have no significantinfluence.Finally, according to the conclusion of this study, this paper gives somesuggestions to improve the share of labor income.It includes improving the weak position of workers and their returns, speeding upthe adjustment of industrial structure, vigorously developing the tertiary industry,strengthening the functions of trade unions, advancing laborer collective negotiationsystem, accelerating foreign trade structure transformation and enhancing thecomprehensive advantage of foreign trade.