The Effect Of Biased Technical Change On Income Distribution In China

In recent years,technological progress has always been the hot issue in economics researches.Scholars at home and abroad in this field make constantly new research progress.Technological progress is the motive force of the long-term economic development.People always tend to focus on the technology itself,but ignore its direction.Technological progress has a direction.Namely if technological progress is more helpful to improve the marginal output of a certain element,the technological progress is biased and towards to this element.In this paper,we use 1978-2012 China provincial panel data to carry out the research to study the influence factors of China’s income distribution from the perspective of biased technological progress.First,our paper utilizes the supply-side normalized CES production function system approach,coupled with feasible generalized nonlinear least square estimation to calculate the index which indicates the technological progress biases of all the provinces in China.Then we use this index and the panel data to analyze the impact of biased technical progress on income distribution.The empirical results show that factor biased technical progress directed to capital in China is one of the reasons of the decline of the labor income share.In addition,we also find that the index of economic development level is negative.Economic growth level will reduce the labor income share.Education can promote the rise of labor share.Although the state-owned enterprises don’t affect the labor income directly,but the coefficient of interaction of the proportion of state-owned enterprises and biased technological progress index is significantly positive,it means that state-owned enterprises can ease the decline of labor income share.When we explore the influence factors of size distribution of income,we find that capital-biased technical progress will decrease the Gini coefficient,it means technical progress directed to capital will narrow the income distribution gap between the residents.