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Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share

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  • John Hutchinson
  • Damiaan Persyn

Abstract

Over the last two decades the share of national income which accrues to labour has followed a marked downward trend across a host of industrialised countries. This paper reassesses the relative importance of several potential causes of this phenomenon. Overall, the findings suggest that lower trade costs and factors often associated with economic integration such as international low-wage competition and industry concentration have contributed to the decline in the labour share. However, their effects have been limited when compared to the effects of skill-based technological change and cyclical price changes of intermediary goods.

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Paper provided by Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, Vives in its series Vives discussion paper series with number 18.

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Date of creation: 2011
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Handle: RePEc:ete:vivwps:18

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Cited by:
  1. Jan Hogrefe & Marcus Kappler, 2013. "The labour share of income: heterogeneous causes for parallel movements?," Journal of Economic Inequality, Springer, vol. 11(3), pages 303-319, September.
  2. Dario Simon Judzik & Hector Sala Lorda, 2014. "The determinants of capital intensity in Japan and the U.S," Working Papers wpdea1404, Department of Applied Economics at Universitat Autonoma of Barcelona.
  3. John Hutchinson & Damiaan Persyn, 2011. "Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share," Vives discussion paper series 18, Katholieke Universiteit Leuven, Faculteit Economie en Bedrijfswetenschappen, Vives.
  4. Michael Siegenthaler & Tobias Stucki, 2014. "Dividing the Pie: the Determinants of Labor’s Share of Income on the Firm Level," KOF Working papers 14-352, KOF Swiss Economic Institute, ETH Zurich.

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