Declining Labor Share
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What Explains The Decline Of The U S Labor Share Of Income An Analysis Of State And Industry Level Data
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Author : Mr.Yasser Abdih
language : en
Publisher: International Monetary Fund
Release Date : 2017-07-24
What Explains The Decline Of The U S Labor Share Of Income An Analysis Of State And Industry Level Data written by Mr.Yasser Abdih and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-24 with Business & Economics categories.
The U.S. labor share of income has been on a secular downward trajectory since the beginning of the new millennium. Using data that are disaggregated across both state and industry, we show the decline in the labor share is broad-based but the extent of the fall varies greatly. Exploiting a new data set on the task characteristics of occupations, the U.S. input-output tables, and the Current Population Survey, we find that in addition to changes in labor institutions, technological change and different forms of trade integration lowered the labor share. In particular, the fall was largest, on average, in industries that saw: a high initial intensity of “routinizable” occupations; steep declines in unionization; a high level of competition from imports; and a high intensity of foreign input usage. Quantitatively, we find that the bulk of the effect comes from changes in technology that are linked to the automation of routine tasks, followed by trade globalization.
Production Technology Market Power And The Decline Of The Labor Share
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Author : Agustin Velasquez
language : en
Publisher: International Monetary Fund
Release Date : 2023-02-10
Production Technology Market Power And The Decline Of The Labor Share written by Agustin Velasquez and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-02-10 with Business & Economics categories.
The labor share has been declining in the United States, and especially so in manufacturing. This paper investigates the role of capital accumulation and market power in explaining this decline. I first estimate the production function of 21 manufacturing sectors along time series and including time-varying markups. The elasticities of substitution for most sectors are estimated below one, implying that capital deepening cannot explain the labor share decline. I then track the long-run evolution of the labor share using the estimated production technology parameters. I decompose aggregate labor share changes into sector re-weights, capital-labor substitution, and market power effects. I find that the increase in market power, as reported in recent studies, can account for, at least, 76 percent of the labor share decline in manufacturing. Absent the rise in market power, the labor share would have remained constant in the second half of the 20th century.
Declining Labor And Capital Shares
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Author : Simcha Barkai
language : en
Publisher:
Release Date : 2017
Declining Labor And Capital Shares written by Simcha Barkai and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
This paper shows that the decline in the labor share over the last 30 years was not offset by an increase in the capital share. I calculate payments to capital as the product of the required rate of return on capital and the value of the capital stock. I document a large decline in the capital share and a large increase in the profit share in the U.S. non-financial corporate sector over the last 30 years. I show that the decline in the capital share is robust to many calculations of the required rate of return and is unlikely to be driven by unobserved capital. I interpret these results through the lens of a standard general equilibrium model, and I show that only an increase in markups can generate a simultaneous decline in the shares of both labor and capital. I provide reduced form empirical evidence that an increase in markups plays a significant role in the decline in the labor share. These results suggest that the decline in the shares of labor and capital are due to an increase in markups and call into question the conclusion that the decline in the labor share is an efficient outcome.
The Elusive Explanation For The Declining Labor Share
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Author : Gene M. Grossman
language : en
Publisher:
Release Date : 2021
The Elusive Explanation For The Declining Labor Share written by Gene M. Grossman and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.
A vast literature seeks to measure and explain the apparent decline in the labor share in national income that has occurred in recent times in the United States and elsewhere. The culprits include technological change, increased globalization and the rise of China, the enhanced exercise of market power by large firms in concentrated product markets, the decline in unionization rates and the erosion in the bargaining power of workers in labor markets, and the changing composition of the workforce due to a slowdown in population growth and a rise in educational attainment. We review this literature, with special emphasis on the pitfalls associated with using cross-sectional data to assess this phenomenon and the reasons why the body of papers collectively explains the phenomenon many times over.
Labor Income Share
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Author : Saumik Paul
language : en
Publisher: Springer Nature
Release Date : 2020-10-01
Labor Income Share written by Saumik Paul and has been published by Springer Nature this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020-10-01 with Business & Economics categories.
This book is about labor income share, which measures the share of national income paid in wages. The global share of income going towards labor is declining, which suggests a more unequal distribution of income. This has sparked debates about fair distribution of personal incomes among academics and policymakers alike. This book joins the discussion by bringing together recent developments in theoretical and empirical research on labor income share and novel insights on the measurement of the labor income share. The aim of this book is to help design policies to reduce inequality and provide useful knowledge to academics, policymakers from government agencies, policy aides in research institutions and think tanks, and broader audiences from public and private organizations.
Declining Labor Shares And The Global Rise Of Corporate Saving
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Author : Loukas Karabarbounis
language : en
Publisher:
Release Date : 2012
Declining Labor Shares And The Global Rise Of Corporate Saving written by Loukas Karabarbounis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
The stability of the labor share is a key foundation in macroeconomic models. We document, however, that the global labor share has significantly declined over the last 30 years. This decline was associated with a significant increase in corporate saving, generally the largest component of national saving. We relate the labor share to corporate saving empirically and theoretically using a model featuring CES production and imperfections in the flow of funds between households and corporations. These two departures from the standard neoclassical model imply that the labor share fluctuates and that corporate saving affects macroeconomic allocations. We argue that it is important to study the labor share and corporate saving jointly, and offer a unified explanation for their trends. A global decline in the cost of capital beginning around 1980 induced firms to shift away from labor and toward capital, financed in part with an increase in corporate saving.
Why Is Labor Receiving A Smaller Share Of Global Income Theory And Empirical Evidence
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Author : Mai Chi Dao
language : en
Publisher: International Monetary Fund
Release Date : 2017-07-24
Why Is Labor Receiving A Smaller Share Of Global Income Theory And Empirical Evidence written by Mai Chi Dao and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-24 with Business & Economics categories.
This paper documents the downward trend in the labor share of global income since the early 1990s, as well as its heterogeneous evolution across countries, industries and worker skill groups, using a newly assembled dataset, and analyzes the drivers behind it. Technological progress, along with varying exposure to routine occupations, explains about half the overall decline in advanced economies, with a larger negative impact on middle-skilled workers. In emerging markets, the labor share evolution is explained predominantly by global integration, particularly the expansion of global value chains that contributed to raising the overall capital intensity in production.
Understanding National Accounts Second Edition
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Author : Lequiller François
language : en
Publisher: OECD Publishing
Release Date : 2014-10-20
Understanding National Accounts Second Edition written by Lequiller François and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-10-20 with categories.
This is an update of OECD 2006 "Understanding National Accounts". It contains new data, new chapters and is adapted to the new systems of national accounts, SNA 2008 and ESA 2010.
Declining Labor Shares And Bargaining Power
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Author : Benjamin Bental
language : en
Publisher:
Release Date : 2009
Declining Labor Shares And Bargaining Power written by Benjamin Bental and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
We model the design of labor market institutions in an economy characterized by moral hazard and irreversible investment. In this setting the institutional design affects the bargaining power of labor. At the optimum, the allocation of bargaining power balances the aforementioned frictions. We examine the impact of improved monitoring and investigate the implication upon labor share, effort and investment. The model's predictions are consistent with recent decreasing labor shares and wages per effective labor units observed in most OECD countries. It is also consistent with rising labor productivity and declining ratio between effective labor and capital found in many of these countries.
Declining Labor Shares And The Global Rise Of Corporate Saving
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Author : Loukas Karabarbounis
language : en
Publisher:
Release Date : 2012
Declining Labor Shares And The Global Rise Of Corporate Saving written by Loukas Karabarbounis and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012 with categories.
The stability of the labor share is a key foundation in macroeconomic models. We document, however, that the global labor share has significantly declined over the last 30 years. This decline was associated with a significant increase in corporate saving, generally the largest component of national saving. We relate the labor share to corporate saving empirically and theoretically using a model featuring CES production and imperfections in the flow of funds between households and corporations. These two departures from the standard neoclassical model imply that the labor share fluctuates and that corporate saving affects macroeconomic allocations. We argue that it is important to study the labor share and corporate saving jointly, and offer a unified explanation for their trends. A global decline in the cost of capital beginning around 1980 induced firms to shift away from labor and toward capital, financed in part with an increase in corporate saving.