A Study On The Impact Of Inclusive Finance Development On China’s Labor Income Share

The matter of factor income distribution has always been a topic of concern in the process of Chinese economic development for a long time.Since the reform and opening-up,the matter of unequal distribution of factor income has caught the eyes of relevant organizations and academia and the continuous decline has caused many scholars to study and discuss and explain from different levels.Judging from the results of this article,since 2004,China’s labor income share has generally been on the rise,but it is still lower than the world average and there are significant regional differences.An excessively low labor income share has caused serious obstacles for improving the pattern of income distribution,maintaining social harmony.Besides,it runs counter to the grand goal of the Chinese Dream.Therefore,analyzing the present status and changing trends of China’s labor income share,and then find a reasonable method to increase the labor income share can be of vital importance.From the core view of inclusive finance,the article discusses the relationship between it and the labor income and finds that the continuous development of inclusive finance has an active effect on increasing labor income share.First of all,the article elaborates the importance of the current research on labor income share,and then describes the content and methods and clarifies the focal point of this article based on the related literature.Next,the article defines and explains the concepts of labor income share and inclusive finance,then analyzes the impact mechanism of inclusive finance on labor income share on the basis of clarifying related theories.Then,the article analyzes 31 provinces in China from 2004 to 2018 about the labor income share during the year,it shows that China’s labor income share is generally on the rise(40%-50%),but the regional differences are more significant,the central and western regions are higher while the eastern regions are lower.Meanwhile,the ten indicators that make up the inclusive financial development index are analyzed and explained from the perspectives of the country and the three major regions,based on this,the inclusive financial development exponent of each region can be estimated,the results show that the level of inclusive financial development in each region has achieved various degrees of increase since 2004.The top standard is in the East,then the West and the Middle gets the lowest standard.Finally,the article uses the three models applicable to the short panel data to measure the data,the analysis shows that:(1)Inclusive financial development has a positive impact on improving labor income share;(2)Increasing the proportion of tertiary industry and introducing foreign investment is conducive to increasing labor income;(3)Global trade globalization especially export trade,technological progress,capital deepening,and union organization have an adverse effect on the labor income.In accordance with the analysis and the results,the paper puts forward the following suggestions:(1)Deepen the breadth of inclusive financial development and elevate the quality of inclusive finance;(2)Adhere to both supply-side and demandside reforms,and encourage the development of high-quality tertiary industries;(3)Create a high-quality foreign trade layout and plan for the core position of the global industrial chain;(4)Cultivate professionals in the field of inclusive finance to strengthen the foundation for increasing the share of labor income.