IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v176y2022ics0040162522000415.html

Sectoral heterogeneity, industrial structure transformation, and changes in total labor income share

Author

Listed:
  • Zhang, Shangfeng
  • Zhu, Chun
  • Li, Xiujie
  • Yu, Xiuwen
  • Fang, Qi

Abstract

In recent years, China's labor income share has undergone substantial changes and the evolution of income distribution is inseparable from the process of industrial structural transformation. From the perspective of sectoral heterogeneity, this study develops Ngai and Pissarides’ (2007) model, constructing a multisector dynamic general equilibrium model. We propose that technological progress or capital deepening will promote the flow of production factors among sectors, with the direction dependent on the substitution elasticity between products, sectoral differences in the rate of technological progress, factor output elasticity, and elasticity of factor substitution. This process of factor flow also causes changes in total labor income share, and the direction parallels the labor share of labor-intensive industries. Combining the development data of China's three major industries during different periods, the results demonstrate that in the industrial period, labor flows from the agricultural sector to the industrial sector and the total labor income share decreases; in the postindustrial period, labor flows from the industrial sector to the service sector and the total labor income share increases. The contribution of this study is in presenting a comprehensive and systematic examination of the impact of sectoral heterogeneity on industrial structure transformation and labor income share, which explains the U-shaped trend of China's overall total labor income share and also helps to further understand the structural transformation of the Chinese economy.

Suggested Citation

  • Zhang, Shangfeng & Zhu, Chun & Li, Xiujie & Yu, Xiuwen & Fang, Qi, 2022. "Sectoral heterogeneity, industrial structure transformation, and changes in total labor income share," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    • Handle: RePEc:eee:tefoso:v:176:y:2022:i:c:s0040162522000415
    DOI: 10.1016/j.techfore.2022.121509
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162522000415
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2022.121509?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Brandt, Loren & Zhu, Xiaodong, 2010. "Accounting for China's Growth," IZA Discussion Papers 4764, IZA Network @ LISER.
    2. Capello, Roberta & Lenzi, Camilla, 2021. "Industry 4.0 and servitisation: Regional patterns of 4.0 technological transformations in Europe," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    3. Zhang, Shangfeng & Liu, Yaoxin & Huang, Duen-Huang, 2021. "Understanding the mystery of continued rapid economic growth," Journal of Business Research, Elsevier, vol. 124(C), pages 529-537.
    4. Zhu, Weiwei & Zhu, Yaqin & Lin, Huaping & Yu, Yu, 2021. "Technology progress bias, industrial structure adjustment, and regional industrial economic growth motivation —— Research on regional industrial transformation and upgrading based on the effect of learning by doing," Technological Forecasting and Social Change, Elsevier, vol. 170(C).
    5. Alvarez-Cuadrado, Francisco & Long, Ngo & Poschke, Markus, 2017. "Capital-labor substitution, structural change and growth," Theoretical Economics, Econometric Society, vol. 12(3), September.
    6. Daron Acemoglu & Veronica Guerrieri, 2008. "Capital Deepening and Nonbalanced Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 467-498, June.
    7. Herrendorf, Berthold & Rogerson, Richard & Valentinyi, Ákos, 2014. "Growth and Structural Transformation," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 6, pages 855-941, Elsevier.
    8. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    9. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
    10. Zhang, Shangfeng & Chen, Congcong & Huang, Duen-Huang & Hu, Lang, 2022. "Measurement of factor price distortion: A new production function method with time-varying elasticity," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    11. Akaev, Askar & Devezas, Tessaleno & Ichkitidze, Yuri & Sarygulov, Askar, 2021. "Forecasting the labor intensity and labor income share for G7 countries in the digital age," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    12. Ju, Jiandong & Lin, Justin Yifu & Wang, Yong, 2015. "Endowment structures, industrial dynamics, and economic growth," Journal of Monetary Economics, Elsevier, vol. 76(C), pages 244-263.
    13. Cao, Kang Hua & Birchenall, Javier A., 2013. "Agricultural productivity, structural change, and economic growth in post-reform China," Journal of Development Economics, Elsevier, vol. 104(C), pages 165-180.
    14. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(4), pages 869-882.
    15. Zhang, Shangfeng & Chen, Congcong & Xu, Siwa & Xu, Bing, 2021. "Measurement of capital allocation efficiency in emerging economies: evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 171(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Long, Yang & Li, YanPing & Yu, Xiaotong & Zou, Siqi, 2026. "Internal pay gaps and human capital upgrading," Finance Research Letters, Elsevier, vol. 89(C).
    2. Feng, Wei & Sun, Shujun & Yuan, Hang, 2023. "Research on the efficiency of factor allocation in the pilot free trade zones," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 727-745.
    3. Ma, Kai & Zhao, Lei, 2024. "The impact of new energy transportation means on China's food import," Research in Transportation Economics, Elsevier, vol. 103(C).
    4. Xi Wu & Yajuan Wang & Hongbo Zhu, 2022. "Does Economic Growth Lead to an Increase in Cultivated Land Pressure? Evidence from China," Land, MDPI, vol. 11(9), pages 1-19, September.
    5. Zhu, Wenpeng, 2023. "Digital financial inclusion and the share of labor income: Firm-level evidence," Finance Research Letters, Elsevier, vol. 56(C).
    6. Xu, Mo & Tao, Changqi & Zou, Xianya, 2024. "How do technology and institutional adaptability promote sustainable economic entrepreneurship and growth?," Journal of Business Research, Elsevier, vol. 172(C).
    7. Yin Dong & Baishu Guo & Dawei He & Xiaoli Liao & Zhengyu Zhang & Xueqin Wu, 2022. "Industrial Transformation and Urban Economic Efficiency Evolution: An Empirical Study of the Yangtze River Economic Belt," IJERPH, MDPI, vol. 19(7), pages 1-19, March.
    8. Zhang, Xiaoru & Jiang, Wei & Wu, Chuanqing, 2026. "Does data factor marketisation effect labour income share? Evidence from Chinese A-share listed companies," Journal of Business Research, Elsevier, vol. 206(C).
    9. Wei, Xiahai & Jiang, Feng & Su, Yaqin, 2024. "More green, less labor gains? Green factory and labor income share in China," Energy Economics, Elsevier, vol. 133(C).
    10. Guo, Bingnan & Feng, Weizhe & Lin, Ji, 2024. "The impact of green finance on labor income share: Evidence from green finance reform and innovation pilot zone," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1347-1358.
    11. Zhao, Pan & Hu, Guoheng & Jin, Peizhen, 2023. "Biased technical change, capital deepening, and efficiency of environmental regulations: Evidence from the Chinese provinces," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    12. Ugur, Mehmet, 2024. "Innovation, market power and the labour share: Evidence from OECD industries," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    13. Yu, Fan & Zheng, Shilin & Zheng, Shuhong & Guo, Chenhao, 2024. "Does carbon ETS affect the distribution of labor's slice of the factor income pie? From the low carbon transition perspective," Energy Economics, Elsevier, vol. 134(C).
    14. Santiago, Joanna & Borges-Tiago, Maria Teresa & Tiago, Flávio, 2024. "Embracing RAISA in restaurants: Exploring customer attitudes toward robot adoption," Technological Forecasting and Social Change, Elsevier, vol. 199(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcolino, Marcos, 2022. "Accounting for structural transformation in the U.S," Journal of Macroeconomics, Elsevier, vol. 71(C).
    2. Li, Shang-ao & Gong, Liutang & Pan, Shan & Luo, Feng, 2020. "Wage and price differences, technology gap and labor flow dynamics," Economic Modelling, Elsevier, vol. 88(C), pages 211-222.
    3. Mariarosaria Comunale & Giulia Felice, 2022. "Trade and structural change: An empirical investigation," International Economics, CEPII research center, issue 171, pages 80-109.
    4. Kevin Genna & Christian Ghiglino & Kazuo Nishimura & Alain Venditti, 2024. "Knowledge-based structural change," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 78(4), pages 1333-1388, December.
    5. Fabian Eckert & Michael Peters, 2018. "Spatial Structural Change," 2018 Meeting Papers 98, Society for Economic Dynamics.
    6. Ye, Longfeng & Robertson, Peter E., 2019. "Hitting the Great Wall: Structural change and China's growth slowdown," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    7. Sáenz, Luis Felipe, 2022. "Time-varying capital intensities and the hump-shaped evolution of economic activity in manufacturing," Journal of Macroeconomics, Elsevier, vol. 73(C).
    8. Ziyao Huang & Fang Yang, 2024. "Macroeconomic Impacts of College Expansion on Structural Transformation and Energy Economy in China: A Heterogeneous Agent General Equilibrium Approach," Mathematics, MDPI, vol. 12(15), pages 1-31, July.
    9. van Neuss, Leif, 2018. "Globalization and deindustrialization in advanced countries," Structural Change and Economic Dynamics, Elsevier, vol. 45(C), pages 49-63.
    10. Alonso-Carrera, Jaime & Raurich, Xavier, 2018. "Labor mobility, structural change and economic growth," Journal of Macroeconomics, Elsevier, vol. 56(C), pages 292-310.
    11. Aristizabal-Ramirez, Maria & Leahy, John & Tesar, Linda L., 2023. "A north-south model of structural change and growth," Journal of Monetary Economics, Elsevier, vol. 133(C), pages 77-102.
    12. Perez Sebastian,Fidel & Steinbuks,Jevgenijs & Feres,Jose Gustavo & Trotter,Ian Michael, 2020. "Electricity Access and Structural Transformation : Evidence from Brazil's Electrification," Policy Research Working Paper Series 9182, The World Bank.
    13. Jaime Alonso-Carrera & María Jesús Freire-Serén & Xavier Raurich, 2017. "Anatomizing the Mechanics of Structural Change," UB School of Economics Working Papers 2017/360, University of Barcelona School of Economics.
    14. Gray, Elie & Grimaud, André & Le Bris, David, 2018. "The Farmer, the Blue-collar, and the Monk: Understanding economic development through saturations of demands and non-homothetic productivity gains," TSE Working Papers 18-906, Toulouse School of Economics (TSE).
    15. Diego Comin & Danial Lashkari & Martí Mestieri, 2021. "Structural Change With Long‐Run Income and Price Effects," Econometrica, Econometric Society, vol. 89(1), pages 311-374, January.
    16. Porzio, Tommaso & Santangelo, Gabriella, 2017. "Structural Change and the Supply of Agricultural Workers," CEPR Discussion Papers 12495, Centre for Economic Policy Research.
    17. Huang, Wenbin & Mishra, Ashok K., 2025. "Understanding agricultural subsidies and factor allocation: A general equilibrium analysis," Economic Modelling, Elsevier, vol. 153(C).
    18. repec:osf:socarx:rfqvt_v1 is not listed on IDEAS
    19. Liao, Junmin, 2020. "The rise of the service sector in China," China Economic Review, Elsevier, vol. 59(C).
    20. Jaime Alonso-Carrera & Giulia Felice & Xavier Raurich, 2018. "Inequality and Structural Change under Non-Linear Engels' Curve," UB School of Economics Working Papers 2018/374, University of Barcelona School of Economics.
    21. Elie Gray & André Grimaud & David Le Bris, 2018. "The Farmer, the Blue-collar, and the Monk: Understanding Economic Development through Saturations of Demands and Non-Homothetic Productivity Gains," CESifo Working Paper Series 6970, CESifo.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:176:y:2022:i:c:s0040162522000415. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.