A recent study has analyzed the changes in labor income share within China”s manufacturing sector from 1998 to 2016. Utilizing extensive firm-level databases, the research highlights varying trends in both aggregate and individual labor shares during this period.
The findings indicate a divergence in labor income distribution, primarily attributed to firms gradually increasing their market share while simultaneously reducing the labor share. This pattern suggests a significant shift in how income generated in the manufacturing sector is allocated.
As firms grow and capture more of the market, the share of income allocated to labor appears to decline. This trend raises important questions about the implications for workers and the overall economy in China.
The study underscores the need for further investigation into the factors influencing these changes and their potential long-term effects on the labor market and economic stability.
