Abstract: As the definitions of labor compensations vary among countries, the issue of labor income share in GDP is always misreading when international comparisons are made. When the labor compensation is defined as employee compensation, the share of labor income will increase with the increase in share of employee in total employment. However, since 2003 the share of employee in total employment has increased very fast in China while the share of labor’s income has remained relatively stable, suggesting a real decline of compensation to waged-workers. Furthermore, the wages in labor market in China has also polarized as the wages of high-wage workers are growing much faster than those of the low-wage workers. The slow growth of wages for the low-wage workers is therefore the main problem existing in income distribution in China.

（ in Reports on China’s Population and Labor (No.13)，Chapter 15 ，2012 ）