Research On The Influence Mechanism Of Industrial Structure Change On Labor Share

Since the third Plenary Session of the eleventh CPC Central Committee in 1978,our country has achieved a higher leap in economic development.The 19 th National Congress of the Communist Party of China(CPC)made a historic judgment that "China’s economy has shifted from a stage of rapid growth to a stage of high-quality development".Income distribution is an important indicator to measure the "shared development" in high-quality development.As an important part of income distribution,labor income share will have a certain impact on high-quality development.Because of the particularity of China’s industrial structure changes,industrial structure changes are considered to be the main reason for the change of labor income share.The reasons for the changes of China’s industrial structure can be analyzed from the perspective of demand side and supply side.Therefore,starting from the upgrading of consumption preference and the difference of technological progress rate,this paper explores the influence mechanism of China’s industrial structure change on labor income share by constructing dynamic stochastic general equilibrium model(DSGE).Firstly,this paper introduces the concept of labor income share,reviews the relevant literature at home and abroad on the impact of industrial structure change and factor substitution elasticity on labor income share;secondly,it analyzes the economic relationship between consumption preference upgrading,industrial structure and labor income share;then,it analyzes the mechanism of labor income share change from the perspective of technology progress rate difference and capital deepening;Finally,based on the elasticity of factor substitution,combined with the different stages of China’s industrial structure change,this paper studies the direction of labor flow and the change of labor income share.The results show that: firstly,the upgrading of household consumption preference leads to the change of industrial structure,which further leads to the change of labor income share.The proportion of labor force in the primary industry is declining,while that in the tertiary industry is rising.The inverted U-shaped change of labor share in the secondary industry ensures the positive U-shaped change of labor income share.Secondly,the difference of technological progress rate between departments leads to the flow of labor force among departments,and the labor force transfers from the Department with fast technological progress rate to the Department with slow technological progress rate.The labor income share of national income is consistent with the labor force change direction of labor intensive industries.Thirdly,when China is in the stage of industrialization,the difference of the elasticity of factor substitution leads to the transfer of labor force from agricultural sector to non-agricultural sector,and the industrial structure changes,which further leads to a downward trend of the overall labor income share.When China is in the stage of deindustrialization,the flow of labor force from industry to service industry further and it leads to an increasing share of total labor income.