Growing income inequality due to biased technological change

Inequality is rising in many countries. This paper presents a growth model in which technological change increases the income share of reproducible factors at the expense of non-reproducible ones. Agents are heterogeneous in wealth. Preferences imply that the saving rate increases with wealth. Consequently, assets (reproducible factor) are less equally distributed than raw labor (non-reproducible factor). This implies that technological change raises the share of the less equally distributed factor, increasing inequality along permanent growth path. When reproducible factors and the state of know-how are low, to adopt new technologies is not profitable, learning-by-doing and technological change ceases, arising stagnation.     

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.     

Economic structure and factor payments

There is a growing body of evidence that the labour payment share in national income varies across countries and over time, suggesting that the popular aggregate Cobb–Douglas production function may not capture income share dynamics. There remains conflicting evidence on the importance of natural resource rents among low income economies and on estimates of the rate of return to produced capital. This paper focuses on the structural differences among countries, confirming the importance of the agriculture sector in estimates of labour and land’s share of factor income based on 81 countries at diverse levels of economic development in the year 2005. I find that cross-country data are best modelled by a CES production function with an elasticity of substitution of 0.8 and that many low income countries have a higher return to capital than the United States.     

Globalization and the decline in labor shares: Exploring the relationship beyond trade and financial flows

We employ data from up to 125 countries during the 1970–2009 period to explore the relationship between globalization and labor share. Existing studies report a negative relationship between trade and investment flows and labor shares. While we also find that economic flows are often negatively related to labor shares, measures of social globalization tend to be positively related to labor shares. While greater mobility of goods and capital may be associated with increases in capital's bargaining power, all else equal, greater flows of information, ideas, and people may increase the bargaining power of workers.     

中国的劳动收入份额为什么趋于下降?——基于二元经济模型的观察与解释

新古典经济学的要素分配理论以劳动力是稀缺资源作为其前提假设,与我国二元经济条件下的现实情况存在较大差距,因而在分析我国劳动收入份额下降时解释力不足。文章修正了新古典经济学的劳动力稀缺要素假定,基于劳动力无限供给假定的二元经济模型和中国数据表现出的异质性特征,建立了一个分析二元经济中劳动收入份额影响因素的理论框架,并运用该理论框架解释了中国劳动收入份额趋降的原因,提出促进劳动密集型技术进步、提高人力资本禀赋、审慎干预劳动市场等方面的政策建议。     

Shouldn't Physical Capital Also Matter for Multinational Enterprise Activity?

The foreign direct investment (FDI) literature has generally failed to find strong systematic evidence of “vertical” motivations in bilateral aggregate FDI and foreign affiliate sales (FAS) data, despite recent evidence of vertical FDI in firm‐level data. Moreover, a Bayesian analysis of the empirical determinants of FDI (and FAS) flows reveals that the parent country's physical capital per worker has a strong positive effect on FDI alongside typical gravity‐equation variables; however, this variable is ignored in the knowledge‐capital (KC) model and most empirical work. We address these two puzzles by introducing relative factor endowment differences into the three‐factor, three‐country knowledge and physical capital extension of the 2 × 2 × 2 KC model. Using a numerical version of our model, we show that horizontal and vertical multinational enterprises' (MNEs') headquarters surface in different parts of the Edgeworth box relating the parent country's skilled labor share relative to its physical capital share (of the parent's and host's endowments). The key economic insight is that horizontal MNE headquarters will be relatively more abundant than vertical MNE headquarters in countries that are abundant in physical capital relative to skilled labor, because of the multi‐plant (single‐plant) structure of horizontal (vertical) MNEs—assuming plants (headquarters) use physical capital (skilled labor) relatively intensively in their setups. The theoretical relationships suggest augmenting empirical FAS gravity equations with (polynomials of) the parent's skilled labor share alongside the parent's physical capital share to explain in aggregate bilateral data the coexistence of horizontal and vertical FAS. The theoretical and empirical results shed light on the positive effect of parent's physical capital share on FAS flows, but also suggest that MNE headquarters may be prominent in parent countries with relatively high and low skilled labor shares—once physical capital is accounted for—a result not suggested by the two‐factor KC model.     

中国经济增长驱动因素识别研究——基于马克思扩大再生产理论的视阈

本文在马克思扩大再生产理论的基础上,放宽了马克思关于所有可能影响经济增长率因素的数据假定,从一般意义上分别对"两部类"划分和"四部类"划分条件下经济增长的内在规定进行了模型推演。结果表明,经济增长率与第Ⅰ部类单位预付资本上所包含的追加资本以及第Ⅰ部类总产品价值占全社会总产品价值的比例呈正相关关系,与第Ⅰ部类资本家消费的绝对量和工人消费的绝对量的比值呈负相关关系。此外,不同经济发展阶段和不同经济周期阶段所对应的决定经济增速的三个方面的因素也各不相同,并且一个国家的长期经济增速存在"先升后降"的一般规律。而中国的经济增长事实与从马克思扩大再生产理论中得出的结论基本吻合。当前我国正处于由工业化中期向工业化后期转变的过渡阶段,随着第Ⅰ部类投资份额逐渐趋于下降,消费将成为未来拉动经济增长的关键引擎。     

Measuring the Labor Income Share of Developing Countries: Lessons From Social Accounting Matrices

This paper addresses the challenges of measuring the labor income share of developing countries. The poor availability and reliability of national account data as well as the fact that self-employed—whose labor income is hard to capture—account for a major share of the workforce and often work in the informal sector render its computation difficult. Consequently, measuring the labor share requires assumptions. I consult social accounting matrices in addition to national account data to gain information on the production structure and self-employed incomes in developing countries. The final data set covers about 90 developing countries from 1990 to 2011. The data suggest that the finding of declining labor shares of previous studies also applies to the sample of low and middle-income countries. Furthermore, I find the labor share in developing countries to be about one-half in size and hence less than the standard “two-thirds” in economic literature.     

Factor function characteristics and origin of economic growth of China

The paper makes an empirical study on factor contribution and its stage variation characteristics during 1952–2005 and 1978–2005 in China. GMM and OLS tests show that the robustness and significance level of the institution, the physical capital and human capital’s contributions are much higher than other factors, and 70% of economic growth is boosted by the capital and the labor input. Factor contribution decomposition and TFP growth indicate trade has the most remarkable influence on economic growth. The state space model finds that physical capital, human capital, technological progress, finance, trade and institution have different effects on economic growth in different periods. Namely, factor contribution does have the characteristics of stage variation.     

Public policy and the creation of active venture capital markets

We assess the effectiveness of different public policy instruments for the creation of active venture capital markets. Our methodology focusses on ‘innovation ratios’, defined to be the shares of high-tech, and of early stage, venture capital investments. We study a unique panel of data for 14 European countries between 1988 and 2001. We have several novel findings. First, we find no evidence of a shortage of supply of venture capital funds in Europe, a result which questions the effectiveness of the most widely used policy for fostering active venture capital markets. We also find other policies to be effective. In particular, the opening of stock markets targeted at entrepreneurial companies has a positive, large effect on the innovation ratios. Reductions in the corporate capital gains tax rate increase the share of both high-tech and early stage investment. A reduction in labor regulation also results in a higher share of high-tech investments. Finally, we find no evidence of an effect of increased public R&D spending on the innovation ratios.     

我国上市公司专利生产技术效率——基于7个行业405家上市公司的经验证据

利用2005—2010年我国7个行业405家上市公司的面板数据,采用随机前沿分析方法和面板数据模型,研究了上市公司的专利生产技术效率及其影响因素和收敛性。研究结果显示:R&D资本投入和R&D劳动投入对专利产出具有正效应,其中R&D劳动投入的正效应更大;上市公司的专利生产技术效率总体上较小,具有增长趋势和收敛性;上市公司的技术装备利用率、资本密集度、国际化水平、国有股比例和公司规模对其专利生产技术效率的提升具有显著影响。     

技术进步偏向对要素收入份额的影响——基于中国工业行业数据的研究

本文利用CES生产函数考察了技术进步偏向与资本一劳动收入份额比值之间的关系,并利用中国工业1979—2011年的数据进行了实证分析。估计结果表明：中国工业的要素替代弹性大于0小于1;资本增强型技术进步变化率小于劳动增强型技术进步变化率,1987年后工业技术进步为劳动节约型的,资本一劳动收入份额比值提高;资本深化、技术进步偏向、外商直接投资以及国际贸易是我国工业资本收入份额持续上升、劳动收入份额持续下降的主要原因,其中劳动节约型技术进步对要素收入份额失衡的影响最大。工业要素分配份额的演变直接体现了国民收入分配格局的失衡,也间接拉大了我国居民之间的收入差距。     

Are prior restrictions on factor shares appropriate in growth accounting estimations?

Several studies make different prior assumptions on the magnitude of factor shares and scale of production when accounting for economic growth. The initial Solow estimations for instance assumed a capital share of 0.3 and constant returns to scale. Most authors have subsequently used the same restrictions just because they were used in previous studies even when production in the countries under study may not necessarily be taking place under constant returns to scale and capital share may be a value not any close to 0.3. This is likely to distort growth accounting estimation results. This study investigates whether these prior restrictions on factor shares and scale of production as commonly used in the literature are appropriate and whether the Solow assumptions are likely biased even in developed countries. Using Kenyan data and structural vector autoregressions, the main findings are; first, in all cases of the unrestricted estimations, the share of physical capital is less than 0.16. An estimation which imposes 0.3 as the share of physical capital in this case would therefore not be in line with the data generating process leading to biased results. Secondly, in all cases, the explanatory power of the model decreases when the restrictions are imposed implying that the restrictions are not appropriate in growth accounting exercises. The paper further disputes the “styled fact” in growth studies that the Solow assumptions may be relevant for developed countries but not developing countries and concludes that the Solow assumptions may be biased even in developed countries.     

Fiscal policies,frictional labor market,and endogenous growth

This paper considers the spillover effects from public spending, and studies optimal fiscal policies in frictional labor markets. We obtain that the optimal shares of government spending in production and consumption are the same as those in a frictionless labor market under the Hosios condition. However, as higher capital accumulation increases the cost of job creation and maintenance, the optimal tax rate of capital income is positive. In addition, when the labor market is frictional, the marginal benefit of labor is larger than the marginal utility of leisure. Thus, consumption and labor should not be taxed uniformly any more. Our calibration suggests that all of the three tax rates should be positive. Moreover, in the situation in which the Hosios condition does not hold, the shares of public productive spending and public consumption both increase when the worker’s bargaining power is greater than the elasticity of search in the matching function.     

The effect of labor market monopsony on economic growth

In this endogenous growth model, a minimum efficient scale of production and workers’ home-to-work travel costs combine to give firms monopsony power, and this monopsony power leads to slower growth. Monopsony drives the wage below the marginal product of labor. This lower wage leads to lower investment in human capital and thereby to a lower growth rate. This makes investment in human capital – and therefore the growth rate – suboptimal. We provide evidence from a cross-country panel to support our model: Urbanization, which we assume is determined by a country’s exogenous population density and cropland area, positively impacts the wage share of output; the wage share positively impacts educational attainment; higher-income countries have higher wage shares; and within-country upticks in the wage share have a positive lagged effect on the growth rate.     

要素市场配置与我国城乡居民收入差距研究

在我国城乡要素市场人为分割情况下,劳动力、土地、资本等要素在城乡间的流动受到限制,要素的这种错误配置导致了较低的配置效率,从而使得城乡间经济收敛的内在机制无法发挥作用。通过选取一定的统计指标,对1990-2011年我国城乡要素收入进行分解,用定性与定量相结合的方法分析要素市场配置对城乡居民收入差距的影响。研究表明,土地要素和劳动力要素对城乡居民收入差距影响最大。应采取完善要素市场配置体制,促进劳动力、土地、资本等要素合理配置,完善政府宏观调控职能等政策缩小城乡居民收入差距。     

我国经济发展方式非均衡特征及优化的政策选择——基于人力资本投资低水平“陷阱”视角的分析

本文以人力资本视角分析我国经济发展方式转变及促进经济可持续性的政策选择。研究表明,人力资本投资在发达国家经济增长方式转型中具有主导性的作用,而改革开放以来我国人力资本投资对经济发展的作用已经落入低水平陷阱,经济发展依赖于物质资本及低端劳动力的数量投入,人力资本与物质资本呈现非均衡特征,而且出现就业压力严峻与人力资本短缺并存的现象,物质资本与人力资本不匹配、人力资本投资结构与人才需求结构错位,以及收入分配与人力资本投资不足等问题日益凸显,经济发展可持续性受到挑战。对此,我国应明确人力资本投资对经济发展方式转变的重要作用和地位,通过增加教育投入、放宽教育准入制度及收入分配改革等渠道,实现人力资本投资的快速增长,促进经济发展方式的优化。     

信息技术的分配效应*——论“互联网+”对劳动收入份额的影响

现有文献大多关注信息技术的“增长效应”，但对其“分配效应”没有进行深入的探讨，尤其是没有研究信息技术如何影响企业初次分配中资本和劳动两种要素的收入份额。本文使用中国工业企业数据库2004—2007年的微观数据，分析企业使用信息技术对要素收入分配格局的影响。本文研究发现，使用信息技术的企业其劳动收入份额更高，并且这一结论对于不同的变量、样本和模型设定都十分稳健。信息技术的分配效应也存在异质性，在内资企业、内销企业、东部地区的企业表现更加明显。对影响机制的讨论表明，使用信息技术在提高企业增加值的同时，更大幅度地提高了平均劳动报酬，从而导致初次分配更加偏向劳动。本文不仅填补了相关领域的空白，而且具有明显的政策含义。     

Improving the estimation of total factor productivity growth: capital operating time in a latent variable approach

Measuring labor and capital services accurately is essential to obtaining reliable estimates of production functions and total factor productivity (TFP) growth. Using data on the operating time of capital, a series that exists for the French business sector, greatly improves the measurement of effective capital services in production. The ensuing estimation results are consistent with Cobb–Douglas technology under constant returns to scale, with the factor elasticities not statistically different from their income shares. In the same framework, TFP growth is estimated as a latent variable and found to be less volatile than accounting residuals, negatively correlated with employment, and free of cyclicality. It is statistically best estimated as a first-order autoregressive process, with an autoregressive coefficient of 0.95. Total factor productivity growth was estimated to have declined steadily between the mid-1970s and mid-1990s, but the rate of decline has diminished since then.     

What Implications Does COVID-19 Have on Sustainable Economic Development in the Medium and Long Terms?

Given the enormous impact that the COVID-19 pandemic had on China’s economy, helping companies to revitalize post-pandemic economic activities promptly is a priority for the whole society. This necessitates the smooth circulation of production-factors among different economic entities, departments, and regions. The pandemic’s huge impact on the economy is evident in the severely hampered flow of these factors, including labor, materials, and capital. Therefore, using data and digital technology, combined with a contact-free allocation of labor, capital, and materials, to accelerate the flow of production-factors is critical to the post-pandemic economy’s restoration. Such a policy can not only provide a short-term stimulus but also a momentum for China’s mid- and long-term sustainable economic development.