What happened to the gains from strong productivity growth?
Over the past decade, the United States economy has experienced strong economic growth due in large part to a resurgence in productivity growth. Little attention has been paid, however, to examining how the gains from this growth have been distributed. In the past few years, observers have noted that the share of income paid to labor has been falling while corporate profits have surged. Also, observers have pointed out that income inequality appears to have widened, with little increase in real wages for low-income workers while executive pay has skyrocketed. Consequently, there has been a growing sentiment among the public that the average household is not sharing in the recent economic prosperity. ; Willis and Wroblewski examine how the gains from increased productivity growth have been distributed. Their analysis focuses on two questions: Has the increase in productivity growth led to a change in the income shares for capital and labor? And, has the strong productivity growth over the past decade led to a change in the distribution of income across households? ; The authors find that the shares of income allocated to labor and capital have been constant on average over the past 35 years. However, during the last decade of high productivity growth, low-income households have seen no increase in real income, and at most only the top 10 percent of the household income distribution experienced real income growth equal to or greater than average labor productivity growth.
Volume (Year): (2007)
Issue (Month): Q I ()
|Contact details of provider:|| Postal: One Memorial Drive, Kansas City, MO 64198|
Phone: (816) 881-2254
Web page: http://www.kansascityfed.org
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
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.:
- Alan Krueger, 1999. "Measuring Labor's Share," Working Papers 792, Princeton University, Department of Economics, Industrial Relations Section..
- repec:fth:prinin:413 is not listed on IDEAS
- Gomme, P. & Greenwood, J., 1993.
"On the Cyclical Allocation of Risk,"
RCER Working Papers
355, University of Rochester - Center for Economic Research (RCER).
- Gomme, P. & Greenwood, J., 1992. "On the Cyclical Allocation of Risk," UWO Department of Economics Working Papers 9205, University of Western Ontario, Department of Economics.
- Paul Gomme & Jeremy Greenwood, 1992. "On the cyclical allocation of risk," Discussion Paper / Institute for Empirical Macroeconomics 71, Federal Reserve Bank of Minneapolis.
- Horvath, Michael & Boldrin, Michele, 1995.
"Labor contracts and business cycles,"
UC3M Working papers. Economics
3905, Universidad Carlos III de Madrid. Departamento de Economía.
- Ian Dew-Becker & Robert J. Gordon, 2005. "Where Did Productivity Growth Go? Inflation Dynamics and the Distribution of Income," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(2), pages 67-150.
- Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-58, December.
- Daniel Feenberg & James Poterba, 1992.
"Income Inequality and the Incomes of Very High Income Taxpayers: Evidence from Tax Returns,"
NBER Working Papers
4229, National Bureau of Economic Research, Inc.
- Daniel R. Feenberg & James M. Poterba, 1993. "Income Inequality and the Incomes of Very High-Income Taxpayers: Evidence from Tax Returns," NBER Chapters, in: Tax Policy and the Economy, Volume 7, pages 145-177 National Bureau of Economic Research, Inc.
- Feenberg, D.R. & Poterba, J.M., 1992. "Income Inequality and the Incomes of Very High Income Taxpayers: Evidence from Tax Returns," Working papers 92-16, Massachusetts Institute of Technology (MIT), Department of Economics.
- David Card & John E. DiNardo, 2002.
"Skill Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles,"
NBER Working Papers
8769, National Bureau of Economic Research, Inc.
- David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
- Fredrik Andersson & Matthew Freedman & John Haltiwanger & Julia Lane & Kathryn Shaw, 2009.
"Reaching for the Stars: Who Pays for Talent in Innovative Industries?,"
Royal Economic Society, vol. 119(538), pages F308-F332, 06.
- Fredrik Andersson & Matthew Freedman & John C. Haltiwanger & Julia Lane & Kathryn L. Shaw, 2006. "Reaching for the Stars: Who Pays for Talent in Innovative Industries?," NBER Working Papers 12435, National Bureau of Economic Research, Inc.
- Lucian Bebchuk & Yaniv Grinstein, 2005.
"The Growth of Executive Pay,"
NBER Working Papers
11443, National Bureau of Economic Research, Inc.
- Alan B. Krueger, 1999.
"Measuring Labor's Share,"
American Economic Review,
American Economic Association, vol. 89(2), pages 45-51, May.
- Per Krusell & Lee E. Ohanian & Jose-Victor Rios-Rull & Giovanni L. Violante, 1997.
"Capital-skill complementarity and inequality: a macroeconomic analysis,"
239, Federal Reserve Bank of Minneapolis.
- Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
- Ian Dew-Becker & Robert J. Gordon, 2005.
"Where Did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income,"
NBER Working Papers
11842, National Bureau of Economic Research, Inc.
- Dew-Becker, Ian & Gordon, Robert J, 2005. "Where did the Productivity Growth Go? Inflation Dynamics and the Distribution of Income," CEPR Discussion Papers 5419, C.E.P.R. Discussion Papers.
- Paul Gomme & Peter Rupert, 2004. "Measuring labor’s share of income," Policy Discussion Papers, Federal Reserve Bank of Cleveland, issue Nov.
- repec:pri:indrel:413 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:fip:fedker:y:2007:i:qi:p:5-23:n:v.92no.1. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LDayrit)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.