Regional disparity of labor’s share in China: Evidence and explanation
AbstractDespite 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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 34522.
Date of creation: Nov 2011
Date of revision:
labor’s share; income distribution; regional disparity;
Other versions of this item:
- Chi, Wei & Qian, Xiaoye, 2013. "Regional disparity of labor's share in China: Evidence and explanation," China Economic Review, Elsevier, vol. 27(C), pages 277-293.
- J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-14 (All new papers)
- NEP-TRA-2011-11-14 (Transition Economics)
- NEP-URE-2011-11-14 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Démurger, Sylvie & Li, Shi & Yang, Juan, 2012.
"Earnings differentials between the public and private sectors in China: Exploring changes for urban local residents in the 2000s,"
China Economic Review,
Elsevier, vol. 23(1), pages 138-153.
- Sylvie Démurger & Shi Li & Juan Yang, 2012. "Earnings Differentials between the Public and Private Sectors in China: Exploring Changes for Urban Local Residents in the 2000s," Post-Print halshs-00627719, HAL.
- Yan Wang & Yudong Yao, 2001. "Sources of China's economic growth, 1952-99 : incorporating human capital accumulation," Policy Research Working Paper Series 2650, The World Bank.
- Lawless, Martina & Whelan, Karl T., 2011.
"Understanding the dynamics of labor shares and inflation,"
Journal of Macroeconomics,
Elsevier, vol. 33(2), pages 121-136, June.
- Lawless, Martina & Whelan, Karl, 2007. "Understanding the dynamics of labor shares and inflation," Working Paper Series 0784, European Central Bank.
- Lawless, Martina & Whelan, Karl, 2007. "Understanding the Dynamics of Labour Shares and Inflation," Research Technical Papers 4/RT/07, Central Bank of Ireland.
- Bentollia, S. & Saint-Paul, G., 1999.
"Explaining Movements in the Labor Share,"
9905, Centro de Estudios Monetarios Y Financieros-.
- Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
- Bentolila, Samuel & Saint-Paul, Gilles, 1998. "Explaining Movements in the Labour Share," CEPR Discussion Papers 1958, C.E.P.R. Discussion Papers.
- Kelejian, Harry H & Prucha, Ingmar R, 1999. "A Generalized Moments Estimator for the Autoregressive Parameter in a Spatial Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(2), pages 509-33, May.
- Alfonso Arpaia & Esther PÃ©rez & Karl Pichelmann, 2009.
"Understanding Labour Income Share Dynamics in Europe,"
European Economy - Economic Papers
379, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Arpaia, Alfonso & Pérez, Esther & Pichelmann, Karl, 2009. "Understanding labour income share dynamics in Europe," MPRA Paper 15649, University Library of Munich, Germany.
- Sandy Dall'erba & Julie Le Gallo, 2003.
"Regional Convergence And The Impact Of European Structural Funds Over 1989-1999: A Spatial Econometric Analysis,"
0310005, EconWPA, revised 12 Feb 2004.
- Sandy Dall'erba & Julie Le Gallo, 2008. "Regional convergence and the impact of European structural funds over 1989-1999: A spatial econometric analysis," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 219-244, 06.
- Oliver J. Blanchard, 1997. "The Medium Run," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 89-158.
- Ghazala Azmat & Alan Manning & John Van Reenen, 2007.
"Privatization, Entry Regulation and the Decline of Labor's Share of GDP: A Cross-Country Analysis of the Network Industries,"
CEP Discussion Papers
dp0806, Centre for Economic Performance, LSE.
- Azmat, Ghazala & Manning, Alan & Van Reenen, John, 2007. "Privatization, Entry Regulation and the Decline of Labour's Share of GDP: A Cross-Country Analysis of the Network Industries," CEPR Discussion Papers 6348, C.E.P.R. Discussion Papers.
- Ghazala Azmat & Alan Manning & John Van Reenen, 2007. "Privatization, entry regulation and the decline of labor's share of GDP: a cross-country analysis of the network industries," LSE Research Online Documents on Economics 4552, London School of Economics and Political Science, LSE Library.
- Baltagi, Badi H. & Song, Seuck Heun & Koh, Won, 2003.
"Testing panel data regression models with spatial error correlation,"
Journal of Econometrics,
Elsevier, vol. 117(1), pages 123-150, November.
- Badi H. Baltagi & Seuck Heun Song & Won Koh, 2002. "Testing Panel Data Regression Models with Spatial Error Correlation," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B6-4, International Conferences on Panel Data.
- Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
- Robert J. Barro, 1991.
"A Cross-Country Study of Growth, Saving, and Government,"
in: National Saving and Economic Performance, pages 271-304
National Bureau of Economic Research, Inc.
- Robert J. Barro, 1989. "A Cross-Country Study of Growth, Saving, and Government," NBER Working Papers 2855, National Bureau of Economic Research, Inc.
- Alain Serres & Stefano Scarpetta & Christine Maisonneuve, 2001. "Falling Wage Shares in Europe and the United States: How Important is Aggregation Bias?," Empirica, Springer, vol. 28(4), pages 375-401, December.
- Douglas, Paul H, 1976. "The Cobb-Douglas Production Function Once Again: Its History, Its Testing, and Some New Empirical Values," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 903-15, October.
- Douglas Gollin, 2001.
"Getting Income Shares Right,"
Department of Economics Working Papers
2001-11, Department of Economics, Williams College.
- Jakub Growiec, 2009. "Determinants of the Labor Share: Evidence from a Panel of Firms," National Bank of Poland Working Papers 69, National Bank of Poland, Economic Institute.
- Alan Krueger, 1999.
"Measuring Labor's Share,"
NBER Working Papers
7006, National Bureau of Economic Research, Inc.
- Young, Andrew T., 2010. "One of the things we know that ain't so: Is US labor's share relatively stable?," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 90-102, March.
- BAI, Chong-En & QIAN, Zhenjie, 2010. "The factor income distribution in China: 1978-2007," China Economic Review, Elsevier, vol. 21(4), pages 650-670, December.
- Harrison, Ann, 2005. "Has Globalization Eroded Labor’s Share? Some Cross-Country Evidence," MPRA Paper 39649, University Library of Munich, Germany.
- Fleisher, Belton M. & Chen, Jian, 1997. "The Coast-Noncoast Income Gap, Productivity, and Regional Economic Policy in China," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 220-236, October.
- Luciano Boggio & Vincenzo Dall'Aglio & Marco Magnani, 2009.
"On Labour Shares in Recent Decades: A Survey,"
DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi
itemq0957, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
- Cai, Fang & Wang, Dewen & Du, Yang, 2002. "Regional disparity and economic growth in China: The impact of labor market distortions," China Economic Review, Elsevier, vol. 13(2-3), pages 197-212.
- Tianlun Jian & Jeffrey D. Sachs & Andrew M. Warner, 1996. "Trends in Regional Inequality in China," NBER Working Papers 5412, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.