Explaining the decline of China's labor share

A wide replication of Oberfield and Raval (2021)

Bibliographic Data

ID21653264
AuthorsHong Yang (0000-0003-1416-0526, School of Economics Renmin University of China Beijing China), Wen Zhang (0000-0002-8166-2879, School of Economics Renmin University of China Beijing China), Zhang Wen (0000-0002-8182-2895, Renmin University of China, corresponding author)
Year2024
Volume39
Issue6
Pages1190-1197
Publication date2024-09-01
Open AccessYes
TypeARTICLE
VenueJournal of Applied Econometrics (JOURNAL)
Journal identifiersISSN: 1099-1255 • E-ISSN: 0883-7252
PublisherWiley (PUBLISHER • GB)
DOI10.1002/jae.3082
OpenAlexW4400174884
LanguageEN
References cited11

China's labor share has declined since late 1990s. Using the methodology developed by Oberfield and Raval, this paper estimates China's aggregate capital‐labor elasticity of substitution, leveraging the estimated micro‐level elasticities. The findings indicate that China's aggregate capital‐labor elasticity falls within the range of 0.9 to 1. Utilizing this estimated aggregate elasticity for labor share decomposition, we find that the bias of technical change emerges as the predominant factor driving the decline in labor share

China · Econometrics · Economics · Efficiency wage · Elasticity of substitution · Geography · Labour economics · Macroeconomics · Wage · Wage share · Economic Growth and Productivity · Fiscal Policy and Economic Growth · Labor market dynamics and wage inequality · Mathematics

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