Impact Of The Structure Of Population Age On The Share Of Labor Income

With the rapid development of China’s economy,the share of labor income has shown a typical oscillating downward trend,the imbalance of national income distribution pattern will restrict the development of economy to high quality.At the same time,with the emergence of the effect of the family planning policy,the age structure of China’s population has undergone great change.According to international standards,China has entered an aging society and the trend of population aging will continue to intensify.As the close contact between the population and labor,this paper mainly focuses on the impact of change of the structure of population age on share of labor income,introducing more reasonable policy for solving aging and improving distribution of factor.This paper raises questions follow the ideas of “problem-raising,-analyzing,-solving and advice-providing”.Firstly,on the basis of the theory of demographic structure transformation,Clark’s theory of factor distribution,and Marshall’s theory of factor distribution,this paper defines the population age structure and the concept of labor income share involved in the article,and analyzes the population age structure and the current situation of labor income share as well as the regional and provincial differences in China.Secondly,we developed a new method utilizing neoclassical economics to establish Solow model including the structure of population age.We,via static equilibrium analysis,found out that the impact of the change of structure of population age on stable share of labor income depend on the elasticity of factor substitution and relevant empirical propositions to be tested.And then,we evaluated the(in)direct transmission mechanism concerned with the structure of population age and the share of labor income from the three following aspects: labor supply effect,the bias effect of technological progress and labor productivity.Then,based on two different adjustment methods because of the change of the statistical caliber in 2004,we remeasure and recalculate the share of labor income from 1995 to 2017 and elasticity of factor substitution of provinces and cities.And on that basis,according to Stata,we use old-age and children dependency ratio as index for judging the structure of population age,adopt fixed effect model and the Driscoll-Kraay method to verify the influence of population age structure on China’s labor income share from the whole,region and threshold.Finally,combined with the research conclusion,the paper puts forward relevant policy suggestions to increase the share of labor income.The theoretical and empirical research conclusions of this paper are as follows:(1)In case of the growth rate of aging more than 0 and elasticity of substitution of capital labor is more than 1,the enhancement of share of labor income is restricted by the increase of old-age dependency ratio and the decease of children dependency ratio.(2)the share of labor income decreased in the wake of old-age dependency ratio’s increase and children dependency ratio’s decline in eastern regions of China;the share of labor income decreased in the wake of children dependency ratio’s decline,however,increased along with old-age dependency ratio’s enhancement in western regions of China.(3)experimental analysis indicated that there are single threshold effect between the structure of population age and the share of labor income.Specifically,the downturn of the share of labor income will faster than before as the gradual increase of old-age dependency ratio,meanwhile,the share of labor income will climb up and then decline as gradual decrease of children dependency ratio.(4)The enhancement of saving ratio is going to reduce the share of labor income;(5)The intervention of human capital and the change of industry structure are able to facilitate the enhancement of the share of labor income,however,the effect is little;the enhancement of share of labor income is restricted by FDI and foreign trade and government.The corresponding advices of above conclusions are:(1)Although the ageing trend is inevitable,the government can ease the problem of reduced labor supply by aging via further improvement of the family planning policy and delayed retirement policy.At the same time,we can also set the transitional population policy reasonably to fill the labor gap caused by the aging population.(2)Raising the education level of whole laborer and strengthening the skill training of employee to raise laborer’s wage level.(3)Improving the retirement and pension system,improving the social security system.Meanwhile,slowing down the capital leaned technological progress brought by the deepening of capital by reducing the precautionary savings of the elderly population.(4)Increasing the share of labor income by taking multiple measures,including further promote market-oriented reform of the elements of production and increase enterprise investment to be more beneficial to the direction of labor progress in order to prevent the demographic age structure shift deepens the capital bias of technological progress because of the incomplete factor market.