An Analysis Of The Declining Labor Share In Chinese GDP

In recent years, China’s labor share of GDP compensation shows a downward trend. Thedata show that the composition of GDP by the income approach, the share of labor remunera-tion declined from51.9%in1995to39.7%in2007, a decline of12percentage points, is stillat a low of44.9%in2011, a cumulative decline of7percentage points. Understand the rea-sons for the decline of the share of labor remuneration, is of great significance to improve therate of consumption and the transformation of economic growth mode.In this paper, I collected the labor compensation share the latest information, employ-ment information corrected statistical standards inconsistencies, revealing the fact that lowand declining share of labor remuneration. This article is based on the analytical framework ofthe classical economic theory (labor, capital, technological progress, market environment to-gether in the share of labor remuneration) in-depth analysis, pointed out that the reasons forthe decline of the share of labor remuneration is the transfer of labor, labor-saving techno-logical progress, industrial transformation and upgrading and the way of opening up to theoutside world. In addition, the Chinese Provincial Panel Data1995-2011decline in the shareof labor remuneration factors empirical analysis, conclusions and theory consistent with thehypothesis. The article also pointed out that the root cause of the current decline in the shareof labor remuneration on a variety of differences of opinion. Although the decline in the shareof labor remuneration is the result of the market, the government can still increase investmentin education and development of labor-intensive industries, accelerate the transformation ofeconomic growth mode, to increase the share of labor remuneration.