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Regional disparity of labor’s share in China: Evidence and explanation

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  • Chi, Wei
  • Xiaoye, Qian

Abstract

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.

Suggested Citation

  • Chi, Wei & Xiaoye, Qian, 2011. "Regional disparity of labor’s share in China: Evidence and explanation," MPRA Paper 34522, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:34522
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    More about this item

    Keywords

    labor’s share; income distribution; regional disparity;

    JEL classification:

    • 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

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