Research On The Impact Of Trade Openness On Labor Income Share In China

Since China joined the WTO in the year of 2001, the economy has been developed rapidly, the rapid expansion of the scale of international trade has been expanded rapidly, foreign trade dependence degree rise in general, the rapid development of economic and trade led to the increase of China's national income.China's dependence on foreign trade in general rose,but at the same time, the labor income share decreased year by year, far less than the share of labor income in some developed countries. Led to our initial distribution becomes unfair. The continued decline in the share of labor income not only does not conform to the our country actively integrate into the world market situation, but also does not conform to the present situation of our country of the new economic norm, it is not conducive to the healthy development of the economy and the construction of harmonious society in China. So the study of the impact of trade openness on China's labor income share is not only has the significance of theoretical, but also the practical significance.We reviewed the related research of domestic and foreign, then this paper based on Environmental Kuznets inverted "U" hypothesis, S-S theorem and the bargaining model illustrates the trade impacts on labor's income share on the basis of the theory,and then summarized the international trade influence on labor's income share transmission mechanism. and then introduces the current situation of China's trade openness and the share of labor income, found that the national data show our morning foreign trade scale is enlarging the total, the development of the depth and breadth of China's trade openness, import and export commodity structure optimization, trade way change, but our labor income share decreased year by year;After the theoretical analysis of the trade effects of the share of labor income, using the 2001-2014 panel data of 31 provinces and cities nationwide, divides into the trade for export and import trade, and were used to measure the trade import and export trade for the explanatory variables, and as far as possible consist in the impact of China's labor income share of other factors(technical progress, urbanization the degree of government intervention, foreign direct investment and economic development level etc),serve as the control variables, analysis the empirical of the trade effects of labor income share in China, found that export and import trade is notconducive to China's labor income share increased, imports will restrain China's labor income share promotion the intermediate products and products in China in recent years mainly imports capital intensive as a very big relationship. Technical progress also reduced the share of labor income in our country, the degree of urbanization will improve the labor income share of China, foreign direct investment in the share of labor income in China has no obvious effect, the fiscal expenditure is conducive to the improvement of labor income share of China, but revenue is not conducive to enhance the share of labor income in China, a region's economic development level and the labor income share exist "Kuznets Curve" relationship.To test the trade's influence on the labor income share whether has regional differences, we will divided the total sample into eastern, central and western.Analysis found international trade on China's different regions of the labor income share have different effects,and export trade will increase the share of labor income in the eastern region of China, but will reduce the share of labor income in the Midwest;import is not conducive to the improvement of labor share in China; technological progress using national data and analysis results are consistent with the regional data namely technical progress is not conducive to workers in our country income share of ascension. The degree of urbanization, using national data and analysis results are consistent with the regional data, the higher the degree of urbanization of the region,the region's share of labor income will be higher. Foreign direct investment with national data and regional data analysis results are consistent, the more foreign direct investment,the higher income share of workers in China. Effect of fiscal revenue and expenditure of labor's income share in the empirical test, consistent test results with our knowledge, namely fiscal expenditure improve the labor income share of the region, and fiscal revenue is lower the labor income share of the region. The economic development level of a region has important function to the area labor's share of national income.in this paper we found that the region's level of economic development in the beginning will reduce the labor income share of people, but when the area economic development to a degree extent will improve the income share of the workers in the region. The relationship between the level of economic development in a region and the share of labor income share the "Kuznets curve".Finally, the policy recommendations are given based on the empirical results.