Study On Labor’s Income Share Movement In Shandong Province

Since the reform and opening up, the Shandong Economic have obtained noteworthyachievements. The quality of economic growth was significantly improved, industrialstructure was further optimized, the process of urbanization is speeding up, people’s lives hasundergone enormous changes. However, along with the rapid economic and socialdevelopment, residents’ income gap is widening and unfair income distribution has becomeurgent problems of economic development in Shandong Province. Share of labor and capitalallocation in the initial distribution determines the final distribution pattern of an economy.Therefore, the labor share of income becomes a breakthrough that we solve the problem ofincome distribution. Labor income share as the entry point of the study, designed to examinethe changes of income distribution in Shandong Province, mainly to answer the followingthree questions: First, what is the trend of changes in labor income share in ShandongProvince? Second, how many macroeconomic effects are there in the changes of labor share?Third, what are the determinants of the changes in the labor share? The first chapter of thispaper describes the research background and the labor share related theoretical and empiricalprogress. Chapter two measures the overall labor income share in Shandong Province, Laborincome share of the three industries and raw labor share of income. Chapter three adds laborincome share into the national income decided model, analyzes the effects of the labor incomeshare changes; Chapter four analyzes the determinants of Shandong labor share of incomechanges; Finally is the conclusion and outlook of this article.The conclusions of this study are the following three:First, we described the movements in labor income share in Shandong from three angles.The overall share of labor income in1993-1996show a downward trend,in1996-2003showsthe upward trend, and then dropped significantly after2003and remained at a low level. Wefound that changes in Shandong labor income share is closely related to the changingindustrial structure Changes in the labor share of income of the three industries and theoverall labor income share had the same change in trend. China Health and Nutrition Survey(CHNS) in Shandong Province, the survey data to study changes in the original labor incomeshare. Due to the limited data and research needs, we have chosen the three years1993,2000 and2006data research, found that the original share of labor income in2000rise slightlyrelative to1993, the original labor income share in2006dropped significantly. In2006, theoriginal labor remuneration accounted for only18.7%of the total labor compensation,education and experience became the main factors affecting the personal income.Second, we studied the economic effects of changing Shandong labor income sharebased on the national income model. The empirical analysis shows that the pulling effect ofthe increase in the labor income share on consumption to be less than the inhibitory effect oninvestment, raise the labor share of income will not be conducive to economic growth. But theresearch on investment and consuption structrue on Shandong Province shows that, there aremore serious inbalance between investment and consuption, at the same time in order toentering the high-income economies Shandong must change the mode of economicdevelopment, so we believe that a moderate increase in Shandong labor income share isfeasible.Third, Shandong labor income share changes determinants by multiple regressionanalysis. The empirical results show that the proportion of tertiary industry, technologicalprogress, the proportion of state-owned economy and the capital-output ratio is the mainfactors to affect the movements of the labor share of income in Shandong. The proportion oftertiary industry has a great influence on the changes in the labor share of income. Theregression coefficient of the technological advances shows that the technological progress iscapital bias-type. Decline in the proportion of state-owned economy has led to a decline in thelabor income share in Shandong. The regression coefficient of the capital-output ratio ispositive, indicating that the relative growth of the price of labor can raise the labor share ofincome. The impact of globalization on the labor income share in Shandong was notsignificant.