CSSN-Effects of Merchandise Trade Structure Changes on Labor Income Share

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Effects of Merchandise Trade Structure Changes on Labor Income Share

Author : Source : The Journal of Quantitative & Technical Economics No.1(2014) 2014-01-07

Abstract: This paper provides a new perspective for the reasons of the change in labor income share in china from the changes of trade structure. There are significant changes in the structure of commodities trade in our country in recent years. Theoretical analysis shows that international trade not only has a direct impact on the labor share of income through international division and specialization, but also has an indirect effect through two mechanisms as factor intensity change and technology deflection. Empirical studies have found that the export has a significant negative effect on the share of labor income while the import has weak positive effect after controlling other influencing factors. Moreover, the degree and the direction of the effects of import and export differ in the different types of factor intensity industries.

Key words: Labor Income Share, Trade Structure, Technological Progress, Factor Intensity

Editor: Yu Hui