Labour Shares and the Role of Capital and Labour Market Imperfections
AbstractIn continental Europe, labour shares in national income have exhibited considerable variation since 1970. Empirical and theoretical research suggests that the evolution of labour markets and labour market imperfections can, in part, explain this phenomenon. The author analyzes the role of capital market imperfections in the determination of the distribution of national income, comparing European and Anglo-Saxon countries. She uses a simple general-equilibrium model to trace the effects of credit and labour market imperfections on factor shares. Simulations indicate that improvements in capital markets can explain lower labour shares. An increase in the degree of employee power results in higher labour shares. Regression results confirm the author's findings. Improvements in credit markets and decreasing employee bargaining power have contributed to shrinking labour shares, especially in Europe. Openness is a negative determinant of labour shares.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of Canada in its series Discussion Papers with number 09-2.
Length: 37 pages
Date of creation: 2009
Date of revision:
Contact details of provider:
Postal: 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada
Phone: 613 782-8845
Fax: 613 782-8874
Web page: http://www.bank-banque-canada.ca/
Economic models; Labour markets; Financial institutions;
Find related papers by JEL classification:
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-14 (All new papers)
- NEP-BEC-2009-02-14 (Business Economics)
- NEP-LAB-2009-02-14 (Labour Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Baltagi, Badi H. & Griffin, James M., 1997. "Pooled estimators vs. their heterogeneous counterparts in the context of dynamic demand for gasoline," Journal of Econometrics, Elsevier, Elsevier, vol. 77(2), pages 303-327, April.
- Bentollia, S. & Saint-Paul, G., 1999.
"Explaining Movements in the Labor Share,"
Papers, Centro de Estudios Monetarios Y Financieros-
9905, Centro de Estudios Monetarios Y Financieros-.
- Bentolila, Samuel & Saint-Paul, Gilles, 1998. "Explaining Movements in the Labour Share," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1958, C.E.P.R. Discussion Papers.
- Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
- Pissarides, Christopher A, 1988. "The Search Equilibrium Approach to Fluctuations in Employment," American Economic Review, American Economic Association, American Economic Association, vol. 78(2), pages 363-68, May.
- Ricardo J. Caballero & Mohamad L. Hammour, 1997.
"Jobless Growth: Appropriability, Factor Substitution, and Unemployment,"
NBER Working Papers
6221, National Bureau of Economic Research, Inc.
- Caballero, Ricardo J. & Hammour, Mohamad L., 1998. "Jobless growth: appropriability, factor substitution, and unemployment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, Elsevier, vol. 48(1), pages 51-94, June.
- Caballero, R.J. & Hammour, M.L., 1997. "Jobless Growth: Appropriability, Factor-Substitution, and Unemployment," Working papers 97-18, Massachusetts Institute of Technology (MIT), Department of Economics.
- Etienne Wasmer & Philippe Weil, 2004.
"The Macroeconomics of Labor and Credit Market Imperfections,"
American Economic Review, American Economic Association,
American Economic Association, vol. 94(4), pages 944-963, September.
- Wasmer, Etienne & Weil, Philippe, 2002. "The Macroeconomics of Labour and Credit Market Imperfections," CEPR Discussion Papers, C.E.P.R. Discussion Papers 3334, C.E.P.R. Discussion Papers.
- Wasmer, Etienne & Weil, Philippe, 2000. "The Macroeconomics of Labor and Credit Market Imperfections," IZA Discussion Papers 179, Institute for the Study of Labor (IZA).
- Arellano, Manuel & Bover, Olympia, 1995.
"Another look at the instrumental variable estimation of error-components models,"
Journal of Econometrics, Elsevier,
Elsevier, vol. 68(1), pages 29-51, July.
- M Arellano & O Bover, 1990. "Another Look at the Instrumental Variable Estimation of Error-Components Models," CEP Discussion Papers dp0007, Centre for Economic Performance, LSE.
- Bertrand, Marianne & Schoar, Antoinette S & Thesmar, David, 2004.
"Banking Deregulation and Industry Structure: Evidence from the French Banking Reforms of 1985,"
CEPR Discussion Papers, C.E.P.R. Discussion Papers
4488, C.E.P.R. Discussion Papers.
- Marianne Bertrand & Antoinette Schoar & David Thesmar, 2007. "Banking Deregulation and Industry Structure: Evidence from the French Banking Reforms of 1985," Journal of Finance, American Finance Association, American Finance Association, vol. 62(2), pages 597-628, 04.
- Philippe Askenazy & Xavier Timbeau, 2003. "Partage de la valeur ajoutÃ©e et rentabilitÃ© du capital en France et aux Ã‰tats-Unis : une rÃ©Ã©valuation ; suivi d'un commentaire de Xavier Timbeau," Ã‰conomie et Statistique, Programme National PersÃ©e, Programme National PersÃ©e, vol. 363(1), pages 167-189.
- AMBLER, Steve & CARDIA, Emanuela & ZIMMERMANN, Christian, 2000.
"International Transmission of the Business Cycle in a Multi-Sector Model,"
Cahiers de recherche, Universite de Montreal, Departement de sciences economiques
2000-06, Universite de Montreal, Departement de sciences economiques.
- Ambler, Steve & Cardia, Emanuela & Zimmermann, Christian, 2002. "International transmission of the business cycle in a multi-sector model," European Economic Review, Elsevier, Elsevier, vol. 46(2), pages 273-300, February.
- Ambler, S. & Cardia, E. & Zimmermann, C., 2000. "International Transmission of the Business Cycle in a Multi-Sector Model," Cahiers de recherche, Centre interuniversitaire de recherche en Ã©conomie quantitative, CIREQ 2000-06, Centre interuniversitaire de recherche en Ã©conomie quantitative, CIREQ.
- Steve Ambler & Emanuela Cardia & Christian Zimmermann, 1998. "International Transmission of the Business Cycle in a Multi-Sectoral Model," Cahiers de recherche CREFE / CREFE Working Papers, CREFE, UniversitÃ© du QuÃ©bec Ã MontrÃ©al 60, CREFE, UniversitÃ© du QuÃ©bec Ã MontrÃ©al.
- Harrison, Ann, 2005. "Has Globalization Eroded Laborâ€™s Share? Some Cross-Country Evidence," MPRA Paper 39649, University Library of Munich, Germany.
- Merz, Monika, 1995. "Search in the labor market and the real business cycle," Journal of Monetary Economics, Elsevier, Elsevier, vol. 36(2), pages 269-300, November.
- Asli DemirgÃƒÂ¼ÃƒÂ§-Kunt & Enrica Detragiache, 1998. "The Determinants of Banking Crises in Developing and Developed Countries," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 81-109, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.