The Evolution And Regional Differences About The Share Of Workers Compensation In National Income Initial Distribution

Since the reform and opening up in1978, our national economy has experienced more than30years of rapid development, the average annual GDP growth rate nearly10%, its total output ranks second in the world. The whole of Chinese people is proud of its economic development achievements. However, with the increasingly widening gap between rich and poor in China in recent years, the public increasing demands a fair and equitable distribution of income. The distribution share of labor compensation in primary field, has become a hot topic of economists.Economists study of long-term distribution of elements in the developed countries shows that a country’s share of the allocation of factor of production is relatively stable in a certain period of time. However, the share of labor compensation in China fell from53.4%in1996to39.7%in2007, a decline of25.6%in the11years, changes in the magnitude is really surprising. The dramatic change has affected the sustainable development of our country and social harmony. The lack of effective social needs, economic growth can only rely on investment and exports, and it will eventually lead to the widening of the gap between the rich and the poor.Firstly, this paper empirical investigates and analysis the trends and characteristics of our country’s the overall share of workers compensation since1995, using the latest data. The study shows that:1995-2002, China’s share of labor compensation is basically stable; rapidly decline in the share of labor compensation in2003-2007, down from49.62%to39.74%, Mr. Li and others have proposed U rule and predicted after$6000in GDP per capita (PPP), China’s labor’s share will be a turning point and gradually increased; Actual data show that from2008to2010, China entered a rise in the share of workers compensation channels, the predictions of Li daokui, but did not continue to rise in2011.Secondly, this paper focuses on comparative study regional differences in labor compensation share of China’s eastern, central and western regions. Through comparative analysis of different time periods, this paper found that gradually reduce in the regional differences in the share of workers compensation. This is related to the flow of labor between regions speed up and regional industrial transfer upgrade.Again, the paper uses quantitative analysis method of fixed and random effects measure the different time periods, different regions of the contribution of labor to output. Empirical Analysis of the reasons for the decline in the share of labor compensation in China, concluded that the sharp decline of labor contribution to output is the main factor causing the decline in the share of workers compensation. Econometric analysis, the sub-periods and regions investigated the contribution of labor to output, regional labor contribution of differences in output shrinking.Finally, this paper discussed how to improve the share of workers compensation in the initial distribution. Measures should be taken effective:control comprehensive large-scale government investment, government investment should be focused on the national leading industries and emerging industries; vigorously develop the service industry, thereby enhancing the contribution of labor to output, to reduce dependence on capital degrees; countries should improve the social security system to protect the residents of the lowest income as soon as possible, ensure the improvement of workers’compensation from policy; empirical analysis of this paper proved the correctness of the western development strategy. Our country should adhere to the investment in the central and western regions, to speed up the industrial transfer between regions, further narrowing the differences between the areas of workers compensation, and eventually realize common prosperity.