The Influence Of Interest Rate Deviation On Labor Income Share

Since the reform and opening up,Chinese economic level has been continuously improved,but there are still many problems below the surface.It is an indisputable fact that Chinese income distribution is uneven and the labor income share is low.In order to improve labor income share and reduce the widening income gap,State has launched many measures,but with little effect.Interest rate policy,as an important means of macro-control,has an important impact on economic growth and income distribution.Compared with western developed countries,Chinese market is less perfect.The direct or indirect government intervention in the factor market still dominates capital price and capital flow,affecting the operation and labor income share of enterprises.This paper firstly attempts to interpret the change of labor income share from the perspective of interest rate deviation at the enterprise level.On the basis of summarizing and combing the existing relevant literature,this paper first constructs a two-variable SVAR model to estimate the equilibrium interest rate of China.Then,540 listed companies in China from 2007 to 2017 are taken as samples to respectively calculate the interest rate deviation and labor income share of each enterprise.Finally,from the Angle of the degree and direction of interest rate deviation,this paper empirically analyzes the influence of interest rate deviation of enterprises with different ownership nature on labor income share.The results of this paper find that the overall effect of interest rate deviation on the labor income share is negative.The effect of interest rate deviation on the labor income share of non-state-owned enterprises is greater than state-owned enterprises.The effect of positive and negative deviation on the share of labor income is negative.When the loan interest rate is bigger than equilibrium interest rate,the positive deviation of interest rate has a bigger negative influence on labor income share.Under the background that Chinese factor market is still not perfect,State should use targeted interest rate policy to let the loan interest rate move toward the equilibrium interest rate.At the same time,State should accelerate the reform of factor market,so as to truly let the market decide the allocation of funds.This can improve the capital allocation efficiency in our country,and it is a new way to improve the labor income share and reduce the income gap.