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Perspectives on the Labor Share

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  • Loukas Karabarbounis

Abstract

As of 2022, the share of US income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the economic and policy implications of the labor share decline.

Suggested Citation

  • Loukas Karabarbounis, 2024. "Perspectives on the Labor Share," Journal of Economic Perspectives, American Economic Association, vol. 38(2), pages 107-136, Spring.
    • Handle: RePEc:aea:jecper:v:38:y:2024:i:2:p:107-36
    DOI: 10.1257/jep.38.2.107
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    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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