The Elusive Explanation For The Declining Labor Share

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The Elusive Explanation for the Declining Labor Share

Author : Gene M. Grossman
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (126 download)

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Book Synopsis The Elusive Explanation for the Declining Labor Share by : Gene M. Grossman

Download or read book The Elusive Explanation for the Declining Labor Share written by Gene M. Grossman and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Declining Labor and Capital Shares

Author : Simcha Barkai
Publisher :
ISBN 13 : 9780355077605
Total Pages : 72 pages
Book Rating : 4.0/5 (776 download)

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Book Synopsis Declining Labor and Capital Shares by : Simcha Barkai

Download or read book Declining Labor and Capital Shares written by Simcha Barkai and published by . This book was released on 2017 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Declining Labor Shares and the Global Rise of Corporate Saving

Author : Loukas Karabarbounis
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (125 download)

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Book Synopsis Declining Labor Shares and the Global Rise of Corporate Saving by : Loukas Karabarbounis

Download or read book Declining Labor Shares and the Global Rise of Corporate Saving written by Loukas Karabarbounis and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Declining Labor Shares and the Global Rise of Corporate Saving

Author : Loukas Karabarbounis
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (114 download)

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Book Synopsis Declining Labor Shares and the Global Rise of Corporate Saving by : Loukas Karabarbounis

Download or read book Declining Labor Shares and the Global Rise of Corporate Saving written by Loukas Karabarbounis and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Wage-Led Growth

Author : Engelbert Stockhammer
Publisher : Springer
ISBN 13 : 1137357932
Total Pages : 329 pages
Book Rating : 4.1/5 (373 download)

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Book Synopsis Wage-Led Growth by : Engelbert Stockhammer

Download or read book Wage-Led Growth written by Engelbert Stockhammer and published by Springer. This book was released on 2013-12-03 with total page 329 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume seeks to go beyond the microeconomic view of wages as a cost having negative consequences on a given firm, to consider the positive macroeconomic dynamics associated with wages as a major component of aggregate demand.

Under-Rewarded Efforts

Author : Santiago Levy Algazi
Publisher : Inter-American Development Bank
ISBN 13 : 1597823058
Total Pages : 323 pages
Book Rating : 4.5/5 (978 download)

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Book Synopsis Under-Rewarded Efforts by : Santiago Levy Algazi

Download or read book Under-Rewarded Efforts written by Santiago Levy Algazi and published by Inter-American Development Bank. This book was released on 2018-07-11 with total page 323 pages. Available in PDF, EPUB and Kindle. Book excerpt: Why has an economy that has done so many things right failed to grow fast? Under-Rewarded Efforts traces Mexico’s disappointing growth to flawed microeconomic policies that have suppressed productivity growth and nullified the expected benefits of the country’s reform efforts. Fast growth will not occur doing more of the same or focusing on issues that may be key bottlenecks to productivity growth elsewhere, but not in Mexico. It will only result from inclusive institutions that effectively protect workers against risks, redistribute towards those in need, and simultaneously align entrepreneurs’ and workers’ incentives to raise productivity.

Unraveling the Wage-Output Disconnect: The Role of Labor Market Power

Author : Melih Firat
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.4/5 (2 download)

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Book Synopsis Unraveling the Wage-Output Disconnect: The Role of Labor Market Power by : Melih Firat

Download or read book Unraveling the Wage-Output Disconnect: The Role of Labor Market Power written by Melih Firat and published by International Monetary Fund. This book was released on 2024-07-09 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we theoretically and empirically explore the role of firm labor market power in the wage-output relationship. We start by laying out a theoretical model with imperfect labor mobility between firms and sectors, which implies upward-sloping labor supply curves that firms face, allowing firms to have labor market power (i.e., wage markdown). Assuming firm heterogeneity under oligopsony, markdowns can be represented as a function of firm labor market share. The model implies that firms with higher labor market share, indicated by a higher payroll share in their respective sectors, exhibit a weaker relationship between the changes in wages and output. We test the model’s prediction using data from the European subsample of the ORBIS dataset spanning from 2000 to 2018. We find that: (i) the pass-through of firm value added growth to wage growth is lower for firms with a higher payroll share in their sectors, with about one-fifth of the pass-through disappearing in firms at the top 1 percentile of the payroll share distribution, relative to an atomic firm; (ii) this pattern holds across various subsamples and timeframes, and also after accounting for several alternative explanations; and (iii) the weakening in the link between value added and wages growth due to firm labor market power intensifies during the downturns in the labor market or in the overall economy.

Production Technology, Market Power, and the Decline of the Labor Share

Author : Agustin Velasquez
Publisher : International Monetary Fund
ISBN 13 :
Total Pages : 41 pages
Book Rating : 4.4/5 (2 download)

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Book Synopsis Production Technology, Market Power, and the Decline of the Labor Share by : Agustin Velasquez

Download or read book Production Technology, Market Power, and the Decline of the Labor Share written by Agustin Velasquez and published by International Monetary Fund. This book was released on 2023-02-10 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.

Structural Change, Market Concentration, and Inequality

Author : Yasuyuki Osumi
Publisher : Springer Nature
ISBN 13 : 981970930X
Total Pages : 169 pages
Book Rating : 4.8/5 (197 download)

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Book Synopsis Structural Change, Market Concentration, and Inequality by : Yasuyuki Osumi

Download or read book Structural Change, Market Concentration, and Inequality written by Yasuyuki Osumi and published by Springer Nature. This book was released on with total page 169 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Applied Economic Research and Trends

Author : Nicholas Tsounis
Publisher : Springer Nature
ISBN 13 : 303149105X
Total Pages : 1229 pages
Book Rating : 4.0/5 (314 download)

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Book Synopsis Applied Economic Research and Trends by : Nicholas Tsounis

Download or read book Applied Economic Research and Trends written by Nicholas Tsounis and published by Springer Nature. This book was released on with total page 1229 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Oxford Handbook of the Law of Work

Author :
Publisher : Oxford University Press
ISBN 13 : 0192697579
Total Pages : 961 pages
Book Rating : 4.1/5 (926 download)

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Book Synopsis The Oxford Handbook of the Law of Work by :

Download or read book The Oxford Handbook of the Law of Work written by and published by Oxford University Press. This book was released on 2024-08-15 with total page 961 pages. Available in PDF, EPUB and Kindle. Book excerpt: At the core of all societies and economies are human beings deploying their energies and talents in productive activities - that is, at work. The law governing human productive activity is a large part of what determines outcomes in terms of social justice, material wellbeing, and the sustainability of both. It is hardly surprising, therefore, that work is heavily regulated. This Handbook examines the 'law of work', a term that includes legislation setting employment standards, collective labour law, workplace discrimination law, the law regulating the contract of employment, and international labour law. It covers the regulation of relations between employer and employee, as well as labour unions, but also discussions on the contested boundaries and efforts to expand the scope of some laws regulating work beyond the traditional boundaries. Written by a team of experts in the field of labour law, the Handbook offers a comprehensive review and analysis, both theoretical and critical. It includes 60 chapters, divided into four parts. Part A establishes the fundamentals, including the historical development of the law of work, why it is needed, the conceptual building blocks, and the unsettled boundaries. Part B considers the core concerns of the law of work, including the contract of employment doctrines, main protections in employment legislation, the regulation of collective relations, discrimination, and human rights. Part C looks at the international and transnational dimension of the law of work. The final Part examines overarching themes, including discussion of recent developments such as gig work, online work, artificial intelligence at work, sustainable development, amongst others.

Shared Capitalism at Work

Author : Douglas L. Kruse
Publisher : University of Chicago Press
ISBN 13 : 0226056961
Total Pages : 433 pages
Book Rating : 4.2/5 (26 download)

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Book Synopsis Shared Capitalism at Work by : Douglas L. Kruse

Download or read book Shared Capitalism at Work written by Douglas L. Kruse and published by University of Chicago Press. This book was released on 2010-06-15 with total page 433 pages. Available in PDF, EPUB and Kindle. Book excerpt: The historical relationship between capital and labor has evolved in the past few decades. One particularly noteworthy development is the rise of shared capitalism, a system in which workers have become partial owners of their firms and thus, in effect, both employees and stockholders. Profit sharing arrangements and gain-sharing bonuses, which tie compensation directly to a firm’s performance, also reflect this new attitude toward labor. Shared Capitalism at Work analyzes the effects of this trend on workers and firms. The contributors focus on four main areas: the fraction of firms that participate in shared capitalism programs in the United States and abroad, the factors that enable these firms to overcome classic free rider and risk problems, the effect of shared capitalism on firm performance, and the impact of shared capitalism on worker well-being. This volume provides essential studies for understanding the increasingly important role of shared capitalism in the modern workplace.

The Theory of Capital

Author : D C Hagued
Publisher : Springer
ISBN 13 : 1349084522
Total Pages : 419 pages
Book Rating : 4.3/5 (49 download)

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Book Synopsis The Theory of Capital by : D C Hagued

Download or read book The Theory of Capital written by D C Hagued and published by Springer. This book was released on 1961-01-01 with total page 419 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Accidental Conflict

Author : Stephen Roach
Publisher : Yale University Press
ISBN 13 : 0300269013
Total Pages : 448 pages
Book Rating : 4.3/5 (2 download)

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Book Synopsis Accidental Conflict by : Stephen Roach

Download or read book Accidental Conflict written by Stephen Roach and published by Yale University Press. This book was released on 2022-11-08 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: The misguided forces driving conflict escalation between America and China, and the path to a new relationship “A timely, fluid, readable assessment of a testy and rapidly changing global relationship.”—Kirkus Reviews (starred review) In the short span of four years, America and China have entered a trade war, a tech war, and a new Cold War. This conflict between the world’s two most powerful nations wouldn’t have happened were it not for an unnecessary clash of false narratives. America falsely blames its trade and technology threats on China yet overlooks its shaky saving foundation. China falsely blames its growth challenges on America’s alleged containment of market-based socialism, ignoring its failed economic rebalancing. In a hard-hitting analysis of both nations’ economies, politics, and policies, Stephen Roach argues that much of the rhetoric on both sides is dangerously misguided, amplified by information distortion, and more a reflection of each nation’s fears and vulnerabilities than a credible assessment of the risks they face. Outlining the disastrous toll of conflict escalation between China and America, Roach offers a new road map to restoring a mutually advantageous relationship.

Investing in America's Workforce

Author : Carl E. Van Horn
Publisher :
ISBN 13 : 9780692163184
Total Pages : pages
Book Rating : 4.1/5 (631 download)

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Book Synopsis Investing in America's Workforce by : Carl E. Van Horn

Download or read book Investing in America's Workforce written by Carl E. Van Horn and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Causes and Consequences of Income Inequality

Author : Ms.Era Dabla-Norris
Publisher : International Monetary Fund
ISBN 13 : 1513547437
Total Pages : 39 pages
Book Rating : 4.5/5 (135 download)

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Book Synopsis Causes and Consequences of Income Inequality by : Ms.Era Dabla-Norris

Download or read book Causes and Consequences of Income Inequality written by Ms.Era Dabla-Norris and published by International Monetary Fund. This book was released on 2015-06-15 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.

Making Globalization Work

Author : Joseph E Stiglitz
Publisher : W. W. Norton & Company
ISBN 13 : 9780393061222
Total Pages : 396 pages
Book Rating : 4.0/5 (612 download)

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Book Synopsis Making Globalization Work by : Joseph E Stiglitz

Download or read book Making Globalization Work written by Joseph E Stiglitz and published by W. W. Norton & Company. This book was released on 2006-08-29 with total page 396 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Four years ago, Joseph E. Stiglitz outlined the problems our rapidly integrating world was facing in Globalization and Its Discontents." "Now, in Making Globalization Work, Stiglitz brings the story up to the present, examining how change has occurred occurred even more rapidly over the past four years, proposing solutions, and looking to the future. He puts forward radical new ways of dealing with the crippling indebtedness of developing countries, recommends a new system of global reserves to overcome international financial instability, and provides new proposals for addressing the current impasse in dealing with global warming - the most important threat to the world's environment. He argues for the reform of global institutions - the United Nations, the International Monetary Fund, and the World Bank - as well as for international trade agreements and intellectual property laws to make these institutions truly capable of responding to the problems of our age. Throughout, Stiglitz makes a compelling case that treating developing countries more fairly is not only morally right but is ultimately to the advantage of the developed world too."--BOOK JACKET.