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Technology, profits and wages

Author

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  • Andrea Coveri
  • Mario Pianta

Abstract

Building on a Post-Keynesian theoretical framework, integrated with an analysis of technology, this article investigates the structural determinants of income distribution. We develop a simultaneous model on wage and profit dynamics identifying as key determinants productivity growth, capital-labour conflict, the relevance of trade unions and different strategies of technological change and offshoring. We perform an industry-level analysis on 38 manufacturing and service sectors for six major European countries from 1994 to 2014. Wage and profit dynamics is shown to be rooted in structural change, productivity growth and capital-labour conflict, with profits driven by product innovation and offshoring, and wages rising faster where new products are relevant and trade unions have a greater role.

Suggested Citation

  • Andrea Coveri & Mario Pianta, 2019. "Technology, profits and wages," LEM Papers Series 2019/35, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    • Handle: RePEc:ssa:lemwps:2019/35
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    Cited by:

    1. Elena Paglialunga & Andrea Coveri & Antonello Zanfei, 2020. "Climate change and inequality in a global context. Exploring climate induced disparities and the reaction of economic systems," Working Papers 2003, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2020.
    2. Coveri, Andrea & Pianta, Mario, 2022. "Drivers of inequality: wages vs. profits in European industries," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 230-242.

    More about this item

    Keywords

    Income distribution; innovation; offshoring; Europe; industries.;
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