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The impact of the productivity dispersion across employers on the labor's income share

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  • Damir Stijepic

    (University of Mainz)

Abstract

I study the distribution of income across the factors of production within the canonical on-the-job search framework. I show that, by weakening the competition between employers, a mean-preserving spread of the employers' productivity distribution decreases the share of the production output that the workers receive. This result is particularly intriguing in light of the rising productivity dispersion and the declining labor share in many countries.

Suggested Citation

  • Damir Stijepic, 2019. "The impact of the productivity dispersion across employers on the labor's income share," Economics Bulletin, AccessEcon, vol. 39(1), pages 73-83.
    • Handle: RePEc:ebl:ecbull:eb-18-00574
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    Cited by:

    1. Stijepic, Damir, 2021. "A cross-country study of skills and unemployment flows," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 55, pages 1-9.
    2. Stijepic Damir, 2020. "Job Mobility and Sorting: Theory and Evidence," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 240(1), pages 19-49, February.

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    More about this item

    Keywords

    labor's share of income; factor income distribution; productivity dispersion; dynamic monopsonistic competition; on-the-job search;
    All these keywords.

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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