Barriers to Capital Accumulation and Aggregate Total Factor Productivity*

I develop a growth model where a single good can be produced with a traditional and a modern technology. The traditional technology features low total factor productivity (TFP) and a low share of reproducible capital. In this framework, barriers to capital accumulation affect technology use and therefore aggregate TFP. The theory thus connects recent models of factor accumulation and of TFP. The model is calibrated by interpreting traditional production as agriculture and nonreproducible capital as land. The theory implies that barriers are associated with large agricultural shares, as supported by cross‐country and time‐series evidence. The required TFP differences needed in the model to account for a given income disparity are reduced by 1/2 relative to the standard model that abstracts from technology choice.     

就业增长、投资与初次分配中的劳动报酬占比

本文通过生产函数和联立方程模型,发现在非农就业增长、投资和劳动报酬占比之间存在着密切的相互联系和影响:在劳动力从农业部门转移到现代部门的过程中,由于未能获得与其边际产出相等的工资报酬,使得劳动报酬占比下降而资本所得份额上升,资本所得份额的上升促进了投资,投资的增加保证了非农就业的持续增长。我们通常把劳动报酬占比下降和高投资率视为中国经济失衡的表现之一并给予特殊关注,但是,本文所揭示的劳动报酬占比变化的内在机制不仅反映了中国经济增长的一些典型特征,也表明高投资率和劳动报酬占比下降并不是经济失衡的表现,它们是非农就业增长的必然结果,也是保证非农就业持续增长的关键原因。劳动报酬占比的下降虽然恶化了居民之间的收入分配,却是中国经济模式所必须经历的发展阶段。     

Production risk and the functional distribution of income in a developing economy: tradeoffs and policy responses

We develop a stochastic endogenous growth model to examine the relationship between the volatility of growth and the factor distribution of income. Our framework incorporates two important features of developing economies: the co-existence of a modern and a traditional sector and the fact that the income generated in the traditional sector can escape taxation. The relationship between volatility and factor distribution is complex, depending upon the source of risk and the elasticity of substitution between capital and labor in the formal sector. The policy options available to the government for counteracting changes in volatility are analyzed. The second best optimal tax structure is also characterized.     

内生农业技术进步的二元经济增长模型——对“东亚奇迹”和中国经济的再解释

通过吸收内生增长理论的思想 ,修正外生农业技术进步的假设 ,本文提出了一个内生农业技术进步的二元经济增长模型 ,并以此对倍受瞩目也颇多争议的“东亚奇迹”及中国经济 ,从二元经济结构转换的角度进行了分析。本文认为 ,“东亚奇迹”是传统农业劳动力不断转向现代非农业部门的结果 ;是现代部门以资本反哺传统部门 ,推动农业技术进步 ,促进劳动力转移的结果 ;也是现代部门均衡发展 ,吸纳剩余劳动力 ,加速结构转换的结果。因此 ,虽然非农部门的全要素生产率提高不够显著 ,但劳动力结构转换仍然推动经济实现了持久的高速增长。     

Can Growth Ease Class Conflict?

This paper proposes a theory that links labor supply to wage growth and economic growth, and the conflict of interest between capital and labor. During the early stages of industrialization of a country, "surplus" labor drawn from the traditional sector of the economy is available to the modern capitalist sector at a constant or only slowly rising wage. As industrialization proceeds, this labor surplus vanishes, leading to wages rising in tandem with the growth of output. As long as there is surplus labor, workers in the modern capitalist sector, who are organized, have little interest in growth as it does not raise wages. The effect of growth is external to them, simply drawing more workers into the capitalist sector and enabling the entrants to receive rents. So capitalist-sector workers would like to redistribute income regardless of the adverse effect on growth. Once the economy grows enough for the subsistence sector to vanish, further growth raises wages. Hence, this change in the structure of the economy leads to a reduction in the intensity of the labor–capital conflict.
The dual economy model implies that growth rates rise over time and fall after the exhaustion of the labor surplus which is consistent with the stylized fact of economic growth.     

Labor reallocation in China: 1978–2011

This paper develops a three-sector model to analysis the mechanism of cross sectoral labor reallocation in China over the period of 1978–2011. The model incorporates factors of sectoral differences in productivity, non-homothetic preference characteristics of consumers, and institutional barriers of labor mobility. Moreover, the model considers changes in the scale of the public sector as an important driving force. We find that there are two effects of changes in the scale of the public sector in declining public sector output on labor reallocation. First, enterprises will increase the share of capital input to labor, resulting in relative expansion of non-agricultural production. Second, residents' income will also increase, together with the relative increase in demand towards non-agricultural goods due to non-homothetic preference characteristics of consumers. Therefore the non-agricultural production will further expand.     

Consequences of a tax on the brain drain for unemployment and income inequality in less developed countries

Welfare implications of an income tax paid by emigrant skilled workers are analyzed in a model which assumes international capital mobility and allows for unemployed labor in the modern sector of a developing country. The tax discourages overinvestment in education and also contributes to the welfare of those remaining through the direct revenue effect. However, expected earnings of unskilled workers decline as a result of the tax, while those of non-migrant skilled workers rise. The tax may thus exacerbate domestic income inequality. In addition, modern sector employment, output, and capital stock may fall.     

Second-best optimal taxation of capital and labor in a developing economy

As commercial integration reduces the reliance on foreign trade taxation, raising tax revenue has become a major concern for the governments of developing economies. This paper examines how the tax burden in a developing economy should be distributed between capital income and labor income. We study a two-sector model, where the traditional sector is “informal” and consequently cannot be taxed by the government. In this setup, we find that the optimal (second-best) tax structure in order to raise a certain amount of revenue requires to tax capital income at least as much as labor income, and possibly more.     

AGE‐DEPENDENT TAXES WITH ENDOGENOUS HUMAN CAPITAL FORMATION

We assess the gains attained by the introduction of age‐dependent labor income taxes in an overlapping generations economy where individuals live a meaningful life cycle and endogenously accumulate human capital. The model is sufficiently rich to isolate the role of general equilibrium effects, credit market imperfections, and different forms of human capital accumulation. The large welfare gains we obtain cannot be attained without age dependence, nor can they be attained with age‐dependent taxes if progressivity of labor income taxes and capital income tax rates are not suitably adjusted to profit from the complementarity of these instruments.     

The effect of corruption on capital accumulation

This paper examines the effect of corruption in infrastructure development as well as in capital and labor markets, on capital accumulation and output in an overlapping generations model. Corruption affects income redistribution, government expenditures on infrastructure, firms’ incentive to invest, and workers’ incentive to supply labor. An increase in corruption in infrastructure development decreases capital accumulation and output if the decrease in the savings of ordinary workers is sufficiently large. An increase in corruption in the capital market decreases capital accumulation and output. An increase in corruption in labor market decreases capital accumulation and output when labor supply is completely inelastic. Simulation results based on plausible parameter values indicate that an increase in corruption in the labor market will also reduce labor supply, capital accumulation and output.