Abstract: Abstract：Technological Progress which deviated from neutral technological progress, leads to changes in the marginal contribution, may be an important factor of the labor income share decline. Based on production function of CES, this article constructed a technological progress misaligned indicator, and estimated the regional technological progress. The results shows: (1) Decomposition shows capital-augmenting technological progress dominated the Chinese economy development in last two decades; (2) Using the dynamic panal data SYS-GMM and corrected LSDV to analyse regional data between 1993-2012, this article found that capital-augmenting technological progress had a significant, robust effect on the share of labor income; (3) Above this foundation, we further decompose the contribution of technological progress on labor income using Wan(2006), the result shows that in the sample interval, more than 20% changes of the labor income share can be explained by capital-augmenting technology.

Key words: labor income share, capital-augmenting technology progress, factor income decomposition