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Revisiting the global decline of the (non-housing) labor share

Author

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  • Gutiérrez, Germán

    () (NYU Stern)

  • Piton, Sophie

    () (Bank of England)

Abstract

We show that cross-country comparisons of corporate labor shares are affected by differences in the delineation of corporate sectors. While the US excludes all self-employed and most dwellings from the corporate sector, other countries include large amounts of both — biasing labor shares downwards. We propose two methods to control for these differences and obtain ‘harmonized’ non-housing labor share series. Contrary to common wisdom, the harmonized series remain stable across all major economies except the US, where the labor share still declines, primarily due to manufacturing. These new facts cast doubts on most technological explanations for the labor share decline.

Suggested Citation

  • Gutiérrez, Germán & Piton, Sophie, 2019. "Revisiting the global decline of the (non-housing) labor share," Bank of England working papers 811, Bank of England.
  • Handle: RePEc:boe:boeewp:0811
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    File URL: https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2019/revisiting-the-global-decline-of-the-non-housing-labor-share.pdf
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    References listed on IDEAS

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    1. repec:aea:aecrev:v:108:y:2018:i:6:p:1488-1542 is not listed on IDEAS
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    Cited by:

    1. Gilbert Cette & Lorraine Koehl & Thomas Philippon, 2019. "Labor Shares in Some Advanced Economies," NBER Working Papers 26136, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Labor share; residential real estate; self-employment; national accounts;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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