Research On The Trend And Influencing Factors Of China's Labor Income Share

Labor income share is a very important Angle to study income gap and reflects the quality of economic growth.This article calculates China's labor income share based on the method of summing up the provincial GDP data of the income method and adjusting the mixed income of self-employed households.It was found that during the period of 1978-2017,the average labor income share in China was 56.81%,showing a shape of rising first,then falling,and then rising.Under the conditions of the perfect competition market and the CES aggregate production function,it is found that the capital-output ratio and capital-biased technological progress affect the labor income share according to the elasticity of capital and labor substitution;The human capital stock affects the labor income share through the "bridge" effect of physical capital.After decomposing the labor income share into the sum of the product of the three internal industry labor income shares and their added value to GDP,it is found that changes in the industrial structure affect labor income shares.When comparing the increase in labor remuneration with the increase in capital remuneration,we find that the amount of labor transfer affects the share of labor income.When comparing the growth rate of labor compensation and the growth rate of labor productivity,we find that foreign direct investment affects the share of labor income.Further regression analysis of inter-provincial panel data from 1985 to 2017 yields:(1)The elasticity of substitution of labor and capital is greater than 1,and the ratio of capital to output has a negative effect on the share of labor income.(2)The impact of human capital stock on labor income share is negative.(3)The effect of capital-enhanced technological progress on the share of labor income is negative.(4)The ratio of added value of the primary industry and the tertiary industry to GDP has a positive effect on the share of labor income,and is the most influential among all the influencing factors.(5)The effect of international trade on labor income share is not significant,and the effect of foreign direct investment on labor income share is negative,but the degree is very small.(6)The transfer of labor force from agricultural sector to non-agricultural sector has no significant impact on labor income share.Based on the above conclusions,the article proposes to expand the middle-income group,vigorously increase capital productivity,improve the matching relationship between labor and capital,and expand vocational education expenditures to increase the labor income share.