| Abstract | For the success of the transformation of Chinese industrial structure and avoiding into the middle income trap, it is very important to understand the formation mechanization and efficiency of the labor income in Chinese economic system. This paper uses the non-competitive input-output model to analyses the evolution and the driving causes of Chinese labor income share mainly from the perspective of demand structure and the efficiency of technology from 1987 to 2007. The result shows that the structure of final demand, the import substitution of final demand, the industrial Structure measured with demand, the return rate of labor, the import intermediate input and the input-output efficiency make it’s contribution of 11%, 2%, 14%, 39%, 1% and 33% to the change of labor income share. Moreover, we find the driving effects of the components of final demand on labor income has greatly declined from 1997 and the driving emphasis of final demand has transferred from domestic Consumption to investment and export, which leads the remarkable decline of Chinese labor income share from 1997. In addition, the change of efficiency of technology including the return rate of labor, the import intermediate input and the input-output efficiency also makes the labor share decrease. |