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Sectoral wage share and its decomposition in China.
- Source :
- International Review of Applied Economics; Jan2023, Vol. 37 Issue 1, p50-75, 26p
- Publication Year :
- 2023
-
Abstract
- This paper investigates sectoral contributions to the trend of national wage share, or the labor income share, during 2000–2014 in China. I apply the logarithmic mean Divisia index (LMDI) decomposition, the method widely used in energy studies, to decompose the trend of the wage share. At a sectoral level, with rapid structural transformation, structural change negatively impacted the wage share through the between-sector effect – the structural and price effects – mainly from agriculture. This result confirms Arthur Lewis's hypothesis that structural transformation has a negative contribution to the wage share. At a national level, when the wage share declined before 2008, the between-sector effect was as significant as the within-sector effect – the wage and productivity effects. After 2008, the within-sector effect directed the increasing wage share trend. This implies that although structural transformation matters to the wage share in a large developing country like China, a wage-productivity nexus has been more influential and determined the increasing trend of the wage share since 2008. [ABSTRACT FROM AUTHOR]
- Subjects :
- WAGE differentials
WAGES
WAGE increases
INCOME
PRICES
REAL wages
Subjects
Details
- Language :
- English
- ISSN :
- 02692171
- Volume :
- 37
- Issue :
- 1
- Database :
- Complementary Index
- Journal :
- International Review of Applied Economics
- Publication Type :
- Academic Journal
- Accession number :
- 161467536
- Full Text :
- https://doi.org/10.1080/02692171.2022.2117281