Chi, Wei and Xiaoye, Qian (2011): Regional disparity of labor’s share in China: Evidence and explanation.
Download (1MB) | Preview
Despite the “growth miracle” of recent decades, labor’s share, i.e., the share of total labor compensation in GDP, has decreased in China. Labor’s share is an important indicator of the primary distribution of national income, and its fall has drawn significant attention from researchers and policymakers. As China’s many regions have different development levels and economic structures, it is very likely that labor’s share will differ across regions. Thus, it is important to examine the regional disparity of labor’s share. Using Chinese provincial data from 1997 to 2007, we find a significant difference in labor’s share between eastern and western China. Then, we use spatial cross-sectional and panel models to show the significant effect of industrial composition and ownership structure on regional labor shares.
|Item Type:||MPRA Paper|
|Original Title:||Regional disparity of labor’s share in China: Evidence and explanation|
|Keywords:||labor’s share; income distribution; regional disparity|
|Subjects:||J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity
R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J30 - General
|Depositing User:||Wei Chi|
|Date Deposited:||04. Nov 2011 18:08|
|Last Modified:||14. Feb 2013 01:18|
L. Anselin, Spatial Econometrics: Methods and Models, Dordrecht Kluwer Academic, 1988.
L. Anselin, J.Le Gallo, H.Jayet, Spatial Panel Econometrics, Springer Berlin Heidelberg, 2008.
C.B. Bai, Z.J. Qian, Factor income share in China: The Story behind the Statistics, Economic Research Journal. 3(2009a) 27-41 (Chinese).
C.B. Bai, Z.J. Qian, Who has eroded residents’ incomes? An analysis of China’s national income distribution patterns, Social Sciences in China. 5(2009b) 99-115 (Chinese).
C.B. Bai, Z.J. Qian, K.P. Wu, Determinants of factor shares in China’s industrial sector, Economic Research Journal. 8 (2008) 16-28 (Chinese).
B.H. Baltagi, Econometric Analysis of Panel Data (Second Edition).John Wiley & Sons, Chichester, United Kingdom,2001.
B.H. Baltagi, S.H. Song, K. Won, Testing panel data regression models with spatial error correlation, Journal of Econometrics. 117 (2003) 123–150.
S. Bentolila, G. Saint-Paul, Explaining movements in the labor share, the B.E. Journal of Macroeconomics, Contributions to Macroeconomics. 3(1) (2003) Article 9.
O. Blanchard, J. Nordhaus, D. William Phelps, Edmund S. The medium run, Brookings Papers on Economic Activity. 2(1997) 89-158.
L. Boggio, V. Dall’Aglio, M. Magnani, On labour shares in recent decades: A survey, Working paper, (2009).
F. Cai, D. Wang, Y. Du, Regional disparity and economic growth in China: The impact of labor market distortions, China Economic Review. 13 (2002) 197-212.
F. Cai, Exploring the fair distribution mechanism in accordance with economic development, People’s Forum, 17th Oct (2005) (Chinese).
F. Cai, Maximum Employment is the economic base of social harmony, Wen Wei Po, 24th Oct (2006) (Chinese).
A. De Serres, S. Scarpetta, C. De la Maisonneuve, Falling wage shares in Europe and the United States: How important is aggregation bias? Empirica. 28 (2001) 375-400.
J.P. Elhorst, Specification and estimation of spatial panel data models, International Regional Science Review. 26 (2003) 244-268.
B. Fleisher, J. Chen, The coastal non-coastal income gap, productivity, and regional economic policy in China, Journal of Comparative Economics. 25 (1997) 220-236.
J. Growiec, Determinants of the labor share: evidence from a panel of firms. National bank of Poland working paper, 69 (2009).
D. Gollin, Setting income shares right, Journal of Political Economy. 110 (2) (2002) 458-474.
D. Gujarati, Labor's share in manufacturing industries, 1949-1964, Industrial and Labor Relations Review. 23(1969) 65-77.
A.E. Harrison, Has globalization eroded labor’s share? Some cross-country evidence, mimeo, University of California, Berkeley, 2002.
C. Hsiao, Analysis of Panel Data, Cambridge University Press, Cambridge, 1986.
T. Jian, J. Sachs, A. Warner, Trends in regional inequality in China, China Economic Review. 7(1) (1996) 2-21.
A.B. Krueger, Measuring labor's share, American Economic Review. 89(2) (1999) 45-51.
D.K. Li, Labor’s share in GDP has gradually decreased, Caijing Magazine. 2nd July, (2007) http: \\finance1jrj1com1cn\news\ 2007207202\0000023819751.html.
D.K. Li, L.L. Liu, H.L. Wang, The U curve of labor share in GDP during economic development, Economic Research Journal. 1(2009) 70-82 (Chinese).
S. Li, The balance of growth and sharing in China, China Finance News. 28th Augest (2007) http: \\ news.xinhuanet.com\fortune\2007204\28\content - 6038867. html.
Li, X. and Wu, B. A non-cooperative bargaining model of urban unemployment in transitional China, Journal of East China Uni. Of Science and technology. No.3. (2006) 46-50 (Chinese).
E. Moral, V. Genre, Labor share developments in the Euro area, Economic Bulletin, Banco de Espaňa, July (2007).
J.M. Poterba, The rate of return to corporate capital and factor shares: new estimates using revised national income accounts and capital stock data, NBER Working Paper #6263 (1997).
E.L. Raffalovich, T.K. Leicht, M. Wallace, Macroeconomic structure and labor's share of income: United States, 1950 to 1980, American Sociological Review. 57(2) (1992) 243-258.
H. Wang, L. Shen, A spatial panel statistical analysis on Chinese economic growth and Energy Consumption, The Journal of Quantitative and Technical Economics. 24(12) (2007) 98-107 (Chinese).
Y. Wang, and Y.D. Yao, Sources of China’s economic growth, incorporating human capital accumulation. WBI Working Paper, the World Bank. 19 (2001) 52-99.
A.T. Young, One of the things we know that aren’t so: Why US labor’s share is not relatively stable, University of Mississippi Mimeo, August, 2006.
F. Yuan, and Y. Li, Capital deepening and employment adjustment in China’s manufacturing sector, China Economic Quarterly, 8(1), October (2008) 198-210 (Chinese).
Available Versions of this Item
- Regional disparity of labor’s share in China: Evidence and explanation. (deposited 04. Nov 2011 18:08) [Currently Displayed]