Measuring Labor’s Share of Income in China: 1993-2008

Lv Guangming
Institute of National Accounts, Beijing Normal University, Beijing, China

 
Abstract: Accurately measuring labor’s share of income is of great importance for China’s national policies, particularly its labor compensation policies during the 12th Five Year Plan period. This paper first analyses the measurement problems of labor’s share of income from the perspectives of definition and data and their influences on the accuracy of the measurement results. Then it sums up and appraises several adjustment methods for existing measurement problems. Finally, the author estimates the operating surplus of private, unincorporated enterprises (OSPUE) in China using data from Urban household survey (UHS), Rural household survey (RHS) and population survey, and further makes a correction to labor’s share of income in China from 1993 to 2008 with data from flow of funds accounts. Finally, the author conducted trend analysis and international comparisons using the results obtained from the first part of the paper.
Key words: labor’s share of income, measurement problem, correction

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