Baoqi Li, Jie Zheng, Jing Jiang
Extensive literature has examined the evolution of the labor income share in the context of the digital economy. However, most studies emphasize the role of digital technologies while overlooking the potential influence of digital institutional arrangements. This study conceptualizes data element marketization as an institutional innovation in the digital economy, exploiting the quasi-natural experiment of “data trading platform pilots” and applying a Difference-in-Differences (DID) model to evaluate its impact on the labor income share. Our study finds that data element marketization significantly increases the labor income share, and this effect operates through expanding employment scale, reducing capital deepening, and weakening enterprise market power, with cascading effects among these mechanisms. Heterogeneity analysis reveals that the positive impact of data element marketization on the labor income share is more pronounced among mature, capital-intensive, private, and large-scaled enterprises, while it remains insignificant for other firm types. Our study suggests that data element marketization fosters a more equitable income distribution. Subsequent policies should strengthen institutional frameworks for data trading, provide targeted support for enterprises in need, and guide data-AI integration toward labor-friendly directions to sustain growth in the labor income share, ensuring that the benefits of data element marketization reach a broader labor force.