Research On The Influence Of Trade Policy Uncertainty On Labor Income Share

Since 1995,the share of China’s labor income in national income has been declining.From 1995 to 2007,China’s labor income share dropped from 51.4% to39.7%,a decline of up about 20%.At the same time,this period is also the fastest period for China to integrate into globalization.Since joining the WTO in 2001,China’s trade liberalization process has made a qualitative leap.The uncertainty of tariffs on Chinese exports by other WTO members has been greatly reduced.China’s unweighted tariff level has increased from about 55% in the 1980 s.It dropped to about 13% in 2002.At the same time,China and the United States have always been very important trading partners of both sides.In 2015,China surpassed Canada to become China’s largest trading partner for the first time.Therefore,in recent years,articles on the uncertainty of China-US trade policy have emerged endlessly.This paper uses the micro-panel data of Chinese manufacturing enterprises from2000 to 2007,and uses the United States most-favored nation tariff treatment obtained after China’s accession to the WTO as a quasi-natural experiment.It uses the double-difference method to explore the impact of trade policy uncertainty on the labor income share of enterprises.The empirical results show that trade policy uncertainty has reduced the labor income share of China’s manufacturing enterprises by increasing the two main ways of importing other factors of production(intermediate and capital goods)and technological progress(biasing capital).The greater the degree of decline in trade policy uncertainty,the more the company’s labor income share will decrease.After conducting robustness tests such as expected effects and placebo tests,the empirical results are still significant.In addition,this article also conducts a heterogeneity analysis of the sample of the total enterprise based on the three criteria of different ownership,trade methods and whether to export.It is concluded that the impact of trade policy uncertainty on the labor income share of the company is private,general trade and non-export.These three types of enterprises are more significant.