Research On The Change Of China's Labor Share Based On Demand Side

The labor share examines the distribution of national income in the initial distribution stage between labor and capital,and is one of the important factors affecting economic development.The impact of the decline in the share of labor share is enormous,which will widen the gap in income distribution among individuals and cause a decline in economic growth.Therefore,the study of labor share has been the focus of scholars at home and abroad.Since the reform and opening up,the income distribution gap is expanding while the Chinese economy is developing at a high speed.Before 2007,China's laborshare was generally stable or declining,and it was almost impossible to reach a consensus after that.After 2008,due to the impact of policy calls and expert appeals,Chinese research on labor share has increased rapidly.In August 2018,Xi Jinping pointed out in the collective study of the Political Bureau of the CPC Central Committee on the construction of a modern economic system,"Building an income distribution system that reflects efficiency and promotes fairness as an important part of building a modern economic system.Accelerating construction reflects efficiency and promotion.A fair income distribution system is a major theoretical and practical issue that promotes the high-quality development of the economy."The non-Kaldo fact of China's labor share is currently the focus of academicattention.At present,most of the studies on the changes in China's labor share are limited to empirical studies,and the research on the construction of mathematical models is relatively lacking.Secondly,most of the current model researches start directly from the macro perspective,and do not discuss the modeling from the micro perspective.Therefore,this paper is different from the existing research.This paper chooses to use a multi-sector model to start modeling from a micro perspective,and discusses the changes in China's labor share based on the demand side,which not only helps to understand the labor share change from a micro level.At the same time,it supplements the current mainstream modeling research based on supply-side angle.On the basis of the multi-sector model,we further added shocks,in order to build a dynamic stochastic general equilibrium model,analyzing the changes of labor share under the impact of technology in different departments through the impulse response graph,and finally simulate the impact of demand preference changing on China's macroeconomic stability for simulating changes in output structure and labor share caused by changing preferences,which has important practical significance.By combining Chinese actual national conditions and establishing a model,this paper can draw the following conclusions:First,the household's consumer demand preferences will affect the labor pattern,which will lead to changes in the labor share.The transfer of labor shift from the primary industry(agriculture)to the secondary(industry)and tertiary industries(service industry),from the secondary industry to the tertiary industry.When the economy develops,the increase of family preference for manufacturing products directly leads to the reduction of the labor force of the primary industry.The imbalance of the proportion of capital labor will cause capital outflow under the influence of preference,which will further lead to the outflow of labor.This process also occurred between the secondary and tertiary industries and the first and third industries,which eventually led to changes in the labor force pattern.Second,the elasticity of demand for household consumption will lead to economic structural changes in the path of broad equilibrium growth.In the generalized balanced growth path,because the income elasticity of demand foragriculture is less than 1 and the demand income elasticity of service products is greater than 1,the share of agricultural employment(and output value)is decreasing,the share of employment(and output value)of service industry is increasing,and the labor force is constantly increasing.The agricultural sector has moved to the service sector and the industrial structure has been continuously upgraded.The difference in labor growth in this process has led to changes in the share of labor income.Third,the improvement of the three industrial technologies will have a positive effect on the overall output,but the impact on the labor income share will be different.The technological upgrading of the agriculture and service sectors will lead to a decline in the share of labor income;the increase in industrial technology will lead to an increase in the share of labor income.Therefore,under the premise of maintaining economic development and changing residents' preferences,improving industrial production technology is the best solution to solve the problem of low labor income share.Fourth,changes in household consumption preferences have the same impact on the sector's capital-output levels,but have different effects on labor income share and total output.The improvement of consumer preferences in the service industry will lead to optimization of consumption structure and positive impact on total output,but it will also result in a decline in the share of labor income;and increase the preference for industrial consumption.The proportion of industrial output will increase,which will have a positive impact on the share of labor income;the increase in agricultural consumption preferences will have a negative impact on total output,but will increase the share of labor income.