Substitution Elasticity of Capital and Labor and the Directed Technological Progress in China's Manufacturing Sector:Based on the Microdata
The substitution elasticity of capital and labor and the directed technological progress are important parameters in the CES production function.Using the plants data of China's Industrial Enterprise Database and the method from micro to macro,the local substitution elasticity of capital and labor of 28 industries are estimated.Then the local elasticities and the heterogeneity of plants and industries in the capital intensity are used to calculate the substitution elasticity of industries and the manufacturing sector.Based on the estimated substitution elasticity,the direction of technological progress is identified.We find that the elasticity of the manufacturing sector shows a downward trend,declining from 1.13 in 1998-2001 to 0.88 in 2011-2013.The direction of technological progress showed a relative capital augmented.The measured alternative elasticity and technological progress direction are used to decompose the contributions of the labor income share in the past 20 years.It turns out that the bias of technological progress is the main factor.The change of future labor income share depends on the relative contributions of relative factor price changes and biased technological progress.
Substitution Elasticity of Capital and LaborDirection of Technical ProgressMicro DataMacro Aggregation
NETL
NSTL
万方数据
