Trade's Impact on the Labor Share: Evidence from German and Italian Regions
AbstractHas the labor share declined? And what is the impact of international trade? These questions are not only relevant in an international context they also matter for understanding the regional distribution of incomes in a given country. In this paper, we study two regions with trade exposures that differ from the rest of the country, and which display distinct changes in the labor share. East German and Southern Italian regions have a degree of international openness which is below the countries’ averages. At the same time, there has been a more pronounced decline in the labor share in East Germany than in West Germany. In Southern Italy, the labor share has increased in recent years. We show that increased trade openness is not the main culprit behind changing labor shares.
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Bibliographic InfoPaper provided by Institut für Angewandte Wirtschaftsforschung (IAW) in its series IAW Discussion Papers with number 46.
Length: 32 pages
Date of creation: Nov 2008
Date of revision:
labor share; trade; regions;
Find related papers by JEL classification:
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
- F10 - International Economics - - Trade - - - General
- R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-05-09 (All new papers)
- NEP-EEC-2009-05-09 (European Economics)
- NEP-INT-2009-05-09 (International Trade)
- NEP-MAC-2009-05-09 (Macroeconomics)
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