Study On Labor Share In Primary Distribution Of China

During more than30years reform and opening up, China’s economic development has made remarkable achievements, but the income gap is widening, there are serious problems in income distribution. Pursuit of equality has been one of the goals of economic development. In the process of economic development, improving efficiency contributes to economic participants’sharing the fruits of economic development, and achieving equitable, a significant problem which relates to a country’s long-term stability. The question of income distribution has been study’s focus of domestic and foreign scholars, it requires efficiency and also fair. Contradiction in income distribution is the source of all social contradictions.With the deepening of reform and opening up, the problems of income distribution system have become increasingly prominent, and income disparities are growing. In recent years, with the continued implementation of reform measures, not only the income gap between urban and rural areas, or between industry, also among the regions, or between industries is the growing. Income distribution, as an important part of social reproduction, are important elements of national economic activity. When income distribution problem is not resolved, the income disparities will continue to expand, social conflicts will be increasingly acute, and ultimately the stability and unity of our society will be shaked, and will bring hidden dangers to the harmonious development of our country in the future. If we want to pave the way for the development of our country, we must narrow the gap of income distribution, especially the primary distribution of gap. Primary distribution is in view of different elements participating in economic activities, allocating the final production according to their contribution, with the result that various elements obtain the appropriate share of he income.This paper studies on income distribution of our country from the perspective of functional allocation, making the labor share as a breakthrough in the primary distribution. First sort the existing domestic and international documents which are related to labor share, and then base on the theory of factor income distribution, consider the evolution of labor share. Since1992, when China’s market economy system was established, the system of income distribution in our country has undergone constant development, and the labor share has also been changing. This paper first describe the labor share change according to the existing data, and do simple international comparison. In2004, statistics caliber of labor’s compensation changed, making the time series data not comparable, this paper simply estimate the surplus of individual business of2004-2008, and eventually make the time series comparable, the results show that:since the market economy established, labor share has been constantly declined, although the statistics caliber changed in2004, subsequently, the decline trend of labor share was not changed; second, through horizontal and vertical contrast of the results, the paper elaborates the influence of low labor share; then elaborates the theoretical basis of labor share’s change with labor transfer model based on the Lewis theory of urban-rural dualistic economic structure; and then, analyze the reason of labor share decline from the perspective of sectors which participate in income distribution; finally from the angle of theory, analyzes which factors will have effect on labor share of China, then analyze the influence extent of those different factors, combining with the theoretical result, using the empirical analysis method, with cointegration theory, and establishing error correction models, the results showed that labor share has a long-run equilibrium relationship with the level of economic development, urban-rural dualistic economic structure strength and the level of education of the workers. The level of economic development, and urban-rural dualistic economic structure strength have a reverse effect on labor share, which inhibit the labor share from growing, when the urban-rural dualistic economic structure strength coefficient improves a unit, labor share declined12.23%, when per capita GDP incremental increased one Yuan, labor share declined0.0143.39%; the level of education of workers changes with labor share in the same direction, promoting the improvement of labor share, the number of specialists and undergraduates in colleges and universities grows1%, labor share grows28.37%. To enhance the labor share, we must first perfect and develop the existing system of income distribution, on this basis, must also firmly raise the level of economic development, enhance the quality of economic development, break the system which limit the labor from transferring between urban and rural areas, optimize the industrial structure, expand investment in education, improve the quality of the workforce.This paper has taken the changes of statistical caliber into account and estimate the2005-2008surplus, the impact of statistic changes has be excluded. There exists following insufficient:first, the estimation in this paper only consider the comparability of time sequence, without taking the comparability of section data into consideration, and there is no reference to the calculation of labor share in other countries; last, there exist many hypothesis when doing theoretical explainations, but we don’t discuss the influence of hypothesis change.