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The Share of Labor Factor Decision: A Comprehensive Theoretical Model
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TitleThe Share of Labor Factor Decision: A Comprehensive Theoretical Model  
AuthorDu Jiuyue  
OrganizationSchool of Economics, Central University of Finance and Economics;。 
Key WordsEconomic aggregate; Labor share; Theoretical model 
AbstractAbstract: This paper construct a comprehensive theoretical model about labor share of economic aggregate, and try to fill the vacancy on theories' induce of the factor shares of economic aggregate under the neoclassic theory frame. The model focuses on the practical impact that market distortions in the developing economies, including the China, and the future impact of technological progress on the future of factor share. On basis of the CES production function, the study is, from the strict micro-basis, through theoretical hypothesis and derivation, getting Labor factor determining equation on the overall level of industry and economy. On the micro level, the biased technology progress and the Market distortion factors are considered; on the industry level, the Dixit-Stiglitz monopoly competition analysis framework are used and the Pareto distribution hypothesis of enterprise size is also carried out; on the overall level, the structural decomposition to the influence of the industrial structure change are carried on, and Structure decomposition are made to the impact that the industrial structure change have on the factor share from the overall level. Based on the integrated theoretical model, This paper discusses the comprehensive impact on the labor shares, which are made by the Market distortion、technological progress、monopolistic competition、industrial structure changes and other factors, and is intended to establish an overall and comprehensive theoretical analysis framework for the study of factor share. This model has a strong theoretical explanation and policy guidance to China's current problems, as in the case that the market monopoly reform of state owned enterprises、market distortion correction between product and factor、and industrial structure optimization have a positive impact on the labor income. Besides, the model offers a theoretic precondition and the analysis foundation for the reasonable economic growth and the increase of national welfare. 
Serial NumberWP1120 
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