IDEAS home Printed from https://ideas.repec.org/a/oup/ecpoli/v34y2019i100p723-759..html
   My bibliography  Save this article

Why is labour receiving a smaller share of global income?

Author

Listed:
  • Mai Chi Dao
  • Mitali Das
  • Zsoka Koczan

Abstract

The labour share of income has been on a downward trend in both advanced and emerging economies. Declining labour shares in emerging economies, though less pronounced, present an important puzzle as they contradict the predictions of classical trade theory. This paper presents a stylized mechanism to reconcile these findings, at the centre of which is routinization, that is, the automation of labour in occupations highly exposed to substitution by computer capital. We assemble a novel dataset and introduce a new measure of the exposure to routinization to analyse the drivers of falling labour shares. While technological progress and exposure to routinization explain over half the overall decline in advanced economies, in emerging markets, the globalization of trade and the accompanying capital deepening are the most significant driver, with technological progress and routinization playing a negligible role.

Suggested Citation

  • Mai Chi Dao & Mitali Das & Zsoka Koczan, 2019. "Why is labour receiving a smaller share of global income?," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 34(100), pages 723-759.
  • Handle: RePEc:oup:ecpoli:v:34:y:2019:i:100:p:723-759.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/epolic/eiaa004
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    E25; F66; O33;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:ecpoli:v:34:y:2019:i:100:p:723-759.. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/cebruuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.