The Impact Of Information Technology On Labor Share

Since the mid-1990s,China’s economic development has revealed an important problem: the share of labor income in the national income distribution has begun to decline.Since the distribution of factor income is closely related to the widening personal income gap in China,the primary distribution largely determines the basic pattern of the final income distribution in the society,so this issue may bring great impact and challenge to the sustainable development of China’s economy.Economists have also conducted a lot of in-depth research on the status,causes and solutions of income distribution from different perspectives.The sharp decline in the share of labor income coincided with the rapid development of information and communication technology in China.At the end of last century,the development of semiconductor technology led to the decline in the price of information equipment,so information technology and equipment began to be widely used in production,greatly changing the traditional production mode.Artificial intelligence,robotic arms and automatic control systems have largely replaced the simple,repetitive manual labor of traditional production,making the process more efficient.China has also begun to attach importance to informatization construction,the information industry has begun to develop rapidly,and the level of information technology has increased rapidly.So did information technology play a role in the decline in the share of labor income? The paper describes the theoretical mechanism of information technology’s influence on labor income share through a theoretical model,and conducts an empirical study based on the survey data of Chinese industrial enterprises in 2004.The relative input of information capital is used to measure the level of information technology,and the influence of information technology on the change of labor income share in China is investigated.Since information capital mainly affects the proportion of factor income through the substitution of traditional capital and labor,and labor forces with different skill levels have different elasticity of substitution of information capital,it can be seen that education input will affect the effect of information technology on the share of labor income.Therefore,the per capita education expenditure of the region was introduced into the model of the influence of technological progress on labor income share for expansion,and the heterogeneity test,robustness test and endogenous test were carried out.The empirical results show that the increase in the relative input of information capital will lead to a significant decline in the share of labor income,mainly because information capital will replace labor and traditional capital.On the other hand,by adding the cross term of per capita education expenditure and relative input of information capital,it can be found that regional education input is conducive to improving the negative impact of informatization on labor income share,because information capital mainly replaces low-skilled labor and is complementary to high-skilled labor.This paper will classify the samples according to enterprise ownership and industry for regression,and it is found that the impact of information technology on labor income share varies among different enterprises,among which information technology of state-owned enterprises and mining industry has the greatest negative impact on labor income share.The higher the level of information,the less negative effect of information technology on labor income.Based on the above analysis,the policy implication of this paper is that although information technology is negatively correlated with labor share,the negative impact of information technology on labor income share is limited,and the effect of information technology on economic development and enterprise performance cannot be ignored.While developing information technology,attention should be paid to increasing education input and training expenditure of labor force,increasing the proportion of high-skilled labor force,slowing down the replacement of low-skilled labor force by informatization,so as to improve income distribution.