The Impact of industrial upgrading on labor income: Evidence from China

Abstract

This paper demonstrates a new way of industrial upgrading from the perspective of improving labor income. By constructing a new index to measure urban industrial upgrading, the influence of regional industrial upgrading on labor income is more accurately evaluated. The results show that industrial upgrading has significantly improved the labor income of employees. The effect of industrial upgrading is the result of the optimal redistribution of resources between industries and within industries. Industrial upgrading enhances the demand and dependence of enterprises on high-skilled labor, that is, human capital. This skill structure change of labor income increases the total labor remuneration by increasing the relative wages, the proportion of employees and labor income of high-skilled workers.