A Study On Labor’s Share And Its Influential Factors In China

Since the reform and opening up, China’s economy has grown rapidly, but its labor’s share has not increased at the same speed. Because the labor’s income is closely related with everyone’s interests, especially in today’s grim international economic environment, the question of labor’s share has drawn great attention from government, academia and the general public.This paper did research on labor’s share which was calculated as the percent of all workers’income in general domestic product in one country. The first chapter analyzed literatures on labor’s share and its influential factors. The second chapter reviewed the labor’s share theories of classical economic school, neo-classical economic school, new Cambridge economic school, institutional economic school, Marxist school. The third chapter calculated LS (labor’s share) from the year of1978to the year of2011, then compared the LS with labor’s contribution to economy, the growth rate of LS with the growth rate of GDP. The fourth chapter compared China’s LS with other countries, such as the typical developed countries and the typical developing countries. Through the comparison, we found that China’s LS was relatively low especially since the year of2003and need to be improved. The fourth chapter did empirical tests on LS’ influential factors and draw the conclusion that labor supply pressure, higher government revenue, the lack of market competition resulted a low labor’s share in our country.