The Impact Of Opening-up On Labor Share In China

In recent years,with the increase in the degree of economic globalization,there has been a decline in the share of labor income on an international scale.After the1980 s,the proportion of labor income in developed countries,especially in European countries,declined(Guscina,2006;Harrison,2002;Blanchard,1997).Domestic scholars research the factor income share from different perspectives,measure the factor income share through the national level,provincial level and industrial data,and basically reach a consensus on the tendency of factor income's inclining to capital.In the process of the rapid development of economy in China,structural contradiction appeared.In terms of income distribution,this contradiction manifests as the distortion and even imbalance of the national income distribution pattern.There is a serious unbalanced distribution phenomenon between labor income and capital returns,and the evolution of China's labor income share is closely related to China's economic opening-up.Before 1991,China's labor income share was basically on the rise.In 1992,China formally established the socialist market economic system,the pace of reform and opening-up was accelerated.The share of labor income began to decline,but it remained at around 59% before 2001.After China's accession to the WTO,there was a significant decline,and the labor income share had been declined to 50% until 2007.It can be seen that the China is accelerating pace of globalization and meanwhile economic opening-up has had an important impact on the share of labor income in China,which makes it difficult for scholars to ignore the relationship between economic opening-up and labor income share.Here is the question,does economic opening-up factor directly result in the evolution of labor income share in China,or do some factors induced by economic opening-up affect labor income share?What are these factors and what's the main factor? In recent years,scholars have gradually realized the role of technological progress in which technological progress is the source of productivity growth,which has formed a broad consensus.However,people are more concerned about technological progress itself,while ignoring the role of technological progress bias,technological progress bias can change factor productivity and then affect the structure of income distribution.This paper takes the biased technological progress as the research entry point,aiming at examining the internal causes of the change of the national income distribution pattern in China.The core question of the study is the impact of opening-up strategy on the biased technological progress and its impact on the change of labor income share in China.The paper carries on the research from three levels including national level and provincial level and industry level and two perspectives including opening-up and technological progress bias,centering on the following three questions.Firstly,the author studies elasticity of substitution and the degree of technological progress bias among the elements of our country.Secondly,what are the characteristics of China's opening-up? How have product trade structure,trade-oriented countries and FDI flow changed since the reform and opening up?Thirdly,how do trade product structure and FDI flow result in the change of labor income share through technological progress? The first chapter of the paper is the introduction,the author summarizes the research background and significance,the research content,the research methods and the data,and points out the possible innovations of the paper.The second chapter is the literature review,the author defines the related concepts,summarizes the theory and empirical progress of the research on labor income share,researches the impact of economic opening-up on technological progress bias,researches the impact of technological progress bias on factor income share,and finds that the measurement of technological progress bias and the impact of economic opening-up on labor income share need for further study.Based on this,the paper centers on the above three issues from the third chapter to the sixth chapter.Through the construction of the model,statistical analysis and empirical analysis,the author explores the mechanism of the impact of biased technological progress on labor income share under the condition of opening-up.The seventh chapter is the conclusion and policy suggestions,the author points out the shortcomings of this paper and further research direction.The main research conclusions of this paper are the following six aspects.Firstly,China's production factors are generally complementary,and technological progress is biased towards capital.Secondly,China increases its dependence on foreign trade and changes the import and export product trade structure,and most of the trade countries are developed countries.Thirdly,under the premise of relatively small elasticity ofsubstitution,the change of China's trade scale and trade product structure makes technological progress biased towards capital,resulting in the decline in labor income share.Fourthly,a large number of FDI is introduced and mainly used in labor-intensive industry of the industrial sector.Fifthly,the different degree of economic opening-up of various regions and provinces in China results in the difference in technological progress bias,thereby influencing the evolution of labor income share.Sixthly,since the new century,the export structure of China's export enterprises has undergone relatively large changes.The proportion of capital-intensive exports increased,the improvement of technical level and the upgrading of export products make technological progress biased towards labor.Although,we research the problems of biased technological progress and labor income share under the opening-up condition from different levels and different perspectives,the policy connotation we obtain is internally consistent: to optimize the product trade structure;to rationally use foreign capital and implement high-quality FDI access policy;to strengthen independent innovation and change the mode of technological progress;to develop education,improve the quality of labor and promote the reform of education management system;to change the mode of economic development;to improve the employment policy and improve the wages and welfare system.The innovation and contribution of this paper lie in three aspects.Firstly,based on the improved HO model,the author makes technological progress endogenous and extends the theoretical model of the impact of trade on technological progress bias and labor income share under the condition of elastic factor and the lack of elasticity of substitution.Secondly,through empirical analysis,the author determines the elasticity of substitution of factor,trade structure and FDI situation,calculates the degree of technological progress bias of manufacturing industry in various provinces of our country,analyzes the impact of technological progress bias on the share of labor income,and tests the effect of opening-up factor on technological progress bias and the share of labor income.Unlike the existing literature,the above analysis of the paper is analyzed under the condition of the determination of elasticity of substitution and on the basis of highlighting product trade structure,trade countries and FDIsources.The author draws on the latest research results abroad and provides a new perspective of analysis.Finally,this paper discusses the impact of economic opening-up on technological progress and the share of labor income from the national level,the provincial level and the industry level,achieving the combination of micro analysis and macro analysis.