Civil Engineering Reference
In-Depth Information
Labor income share depends on the co-affection of several variables. Considering
the production factors, the neoclassical economics consider capital-output ratio, per
capita amount of capital, and technological progress as the benchmark explanatory
variables to labor income according to the production function (
Bentolina and Saint-
Paul 2003
;
Luo and Zhang 2009
;
Xiao and Zhou 2010
;
Raurich et al. 2012
etc.).
Zhou et al.
(
2010b
) explain the determinant theory of labor income share from three
different perspectives: neoclassical factors, globalization policy, and institutions.
Considering the policy, the mechanism of trade policy and industrial policy to
labor income share draws great considerations (
Jaumotte and Tytell 2008
;
Arpaia
et al. 2009
;
Bai and Qian 2010
;
Lawless and Whelan 2011
). While
Luo and Zhang
(
2009
)and
Decreuse and Maarek
(
2011
) consider that the Foreign Direct Investment
(FDI) influence has influence on the labor share.
Considering the institution, the study is all about variables like economic
development, governmental revenue and expenditure, scale of state-owned enter-
prises, and tax burden. The influence of economic development is in complex and
nonlinear way (
Li et al. 2009
;
Luo and Zhang 2009
); the influence of governmental
revenue and expenditure is more profound than the industrial structure, which is
characterized as indirect, persistent, and crowd in (
Fang 2011
);
Bai and Qian
(
2010
)
find the influence of tax burden is non-neutral empirically.
The study on labor income share considers various explanatory variables, but the
results are not the same. There are three aspects of contradictory results at least.
Question 1: The influence of technological progress to labor income share.
Luo
and Zhang
(
2009
)and
Bai and Qian
(
2009b
) find the influence is not significant,
while
Xiao and Zhou
(
2010
) find it is significant.
Question 2: The influence of imports and exports to labor income share. It is not
significant in the study of
Bai and Qian
(
2009a
)and
Luo and Zhang
(
2009
), but it
is on the contrary in the study of
Jiang and Zhang
(
2008
)and
Zhou et al.
(
2010a
).
Question 3: The influence of industry structure to labor income share. The result of
significant influence has been widely accepted. But few find the influence is not
significant enough (
Fang 2011
).
In this paper, we identify the determinant and mechanism of labor income share
using mixed data nonparametric variable detection method and try to give a solid
explanation about the three contradictory results.
2
Variable, Data, and Econometrics Method
Labor income share: In this paper, we define the labor income share as the ratio of
the labor remuneration to GDP.
The ratio capital to yield measures the deeping of capital, presented as kty.
And we employ the per employer yield as the measure of technological progress,
presented as tech. The ratio of FDI to GDP uses as the measure of fdi in this
paper. The ratio of imports and exports to GDP is the agent variable for the
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