Globalization, creative destruction, and labour share change: evidence on the determinants and mechanisms from longitudinal plant-level data
The labour share of GDP has declined in recent decades in many leading economies. This paper examines the mechanisms of falling labour share using Finnish manufacturing plant-level data over three decades. Using a useful variant of the decomposition method, we make a distinction between the changes in the average plant and the micro-level restructuring. We show that micro-level restructuring is the link between the declining labour share and increasing productivity, and that increased international trade is a factor underlying those shifts. Copyright 2012 Oxford University Press 2011 All rights reserved, Oxford University Press.
Volume (Year): 64 (2012)
Issue (Month): 2 (April)
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