An Empirical Study On The Effect Of Human Capital On The Share Of Labor Income In China

After the initial distribution of national income is divided into three categories,namely,the remuneration of workers,capital income and government tax.In recent years,many studies have found that the share of labor income in China shows a downward trend,which may cause problems such as widening income gaps,sluggish consumption and investment dependence,thus become a difficult problem that has plagued China's sustained economic development.As an important factor affecting labor productivity and labor compensation,human capital undoubtedly plays an important role in the change of labor income share.Therefore,from the perspective of human capital,this paper studies the changes of labor income share.On the basis of reviewing the relevant literature,this paper firstly analyzes the wage effect and labor productivity effect of human capital on labor income share from the theoretical point of view and influences the exertion of human capital effect in China.In particular,the internal and external economic environment of human capital wage effect is analyzed,including the characteristics of dual economic structure in China and the level of foreign direct investment.Secondly,it analyzes the current situation of human capital and labor income share in China from the national and regional dimensions.Finally,from the empirical point of view,by building a panel threshold model and using the aforementioned economic environment variables as thresholds,we use the panel data of 30 provinces,cities,and autonomous regions in China from 1997 to 2015 to empirically test the threshold effect of China's human capital on labor share.The empirical results show that human capital has a significant negative effect on the share of labor income,that is,the positive effect of human capital wage is weaker than the negative effect of labor productivity.Moreover,the influence of human capital on labor income share has significant threshold characteristics.The concrete manifestation is that the negative influence of human capital on labor income share will weaken gradually with the continuous transformation of dual economic structure of our country;When the level of foreign direct investment exceeds the corresponding threshold,the negative impact of human capital on the share of labor income will also be weakened.This result also verifies the conclusion that the transformation of the dual economic structure and the improvement in the level of foreign direct investment can promote the effect of human capital wage in the theoretical analysis part of this paper.Finally,according to the conclusions of the study,the paper puts forward some policy suggestions to alleviate the declining trend of labor income share in China.