Power relations and the labour share of income in China

Hao Qi

Cambridge Journal of Economics, 2020, vol. 44, issue 3, 607-628

Abstract: The labour share of income in China substantially declined from the mid-1990s to the late 2000s. We analyse the effect of power relations among the state, workers and managers on the labour share, during China’s economic transition from a state–socialist economy to a market economy. We take a Marxian approach in variable selection to reflect power relations over the two stages of China’s reform era. The econometric analysis shows that two major changes in power relations—the social contract between the state and workers disappeared and workers’ power relative to management declined—have a significant effect on the labour share. Furthermore, sectoral changes have no significant effect on the labour share between 1999 and 2010.

Keywords: Labour share of income; Power relations; Social contract; Marxian economics; Chinese economy (search for similar items in EconPapers)
Date: 2020
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