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A bit of a miracle no more: the decline of the labor share

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  • Roc Armenter

Abstract

Why has labor's share of national income been declining steeply? How income is divided between labor and capital has implications for inequality and long-run economic growth. But as Roc Armenter explains, measuring labor's share is not so straightforward.

Suggested Citation

  • Roc Armenter, 2015. "A bit of a miracle no more: the decline of the labor share," Business Review, Federal Reserve Bank of Philadelphia, issue Q3, pages 1-9.
    • Handle: RePEc:fip:fedpbr:00023
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    References listed on IDEAS

    as
    1. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    2. John Romalis, 2004. "Factor Proportions and the Structure of Commodity Trade," American Economic Review, American Economic Association, vol. 94(1), pages 67-97, March.
    3. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    4. Trefler, Daniel, 1993. "International Factor Price Differences: Leontief Was Right!," Journal of Political Economy, University of Chicago Press, vol. 101(6), pages 961-987, December.
    5. 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.
    6. Keith Sill, 2002. "Widening the wage gap: the skill premium and technology," Business Review, Federal Reserve Bank of Philadelphia, issue Q4, pages 25-32.
    7. Margaret M. Jacobson & Filippo Occhino, 2012. "Labor's declining share of income and rising inequality," Economic Commentary, Federal Reserve Bank of Cleveland, issue Sept.
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    Cited by:

    1. Jan De Loecker & Jan Eeckhout & Gabriel Unger, 2020. "The Rise of Market Power and the Macroeconomic Implications [“Econometric Tools for Analyzing Market Outcomes”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 561-644.
    2. Weicheng Lian, 2019. "Technological Changes, Offshoring, and the Labor Share," IMF Working Papers 2019/142, International Monetary Fund.
    3. Musa Orak, 2017. "Capital-Task Complementarity and the Decline of the U.S. Labor Share of Income," International Finance Discussion Papers 1200, Board of Governors of the Federal Reserve System (U.S.).
    4. Alexander Doser & Ricardo Nunes & Nikhil Rao & Viacheslav Sheremirov, 2023. "Inflation expectations and nonlinearities in the Phillips curve," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 38(4), pages 453-471, June.
    5. Lee Ohanian & Musa Orak & Shihan Shen, 2023. "Revisiting Capital-Skill Complementarity, Inequality, and Labor Share," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 479-505, December.
    6. Seth G. Benzell & Laurence J. Kotlikoff & Guillermo LaGarda & Jeffrey D. Sachs, 2015. "Robots Are Us: Some Economics of Human Replacement," NBER Working Papers 20941, National Bureau of Economic Research, Inc.
    7. Mondolo, Jasmine, 2020. "Macro and microeconomic evidence on investment, factor shares, firm and labor dynamics in Italy and in Trentino," MPRA Paper 99138, University Library of Munich, Germany.
    8. Mondolo, Jasmine, 2021. "Macroeconomic dynamics and the role of market power. The case of Italy," MPRA Paper 110172, University Library of Munich, Germany, revised 05 Oct 2021.

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