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The global decline in the labour income share- is capital the answer to Germany’s current account surplus?

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  • Bennet Berger
  • Guntram B. Wolff

Abstract

This paper links the major divergences between the three largest euro-area countries in terms of unit labour costs and current accounts, to the broader debate on labour income shares. The authors show that Germany, like the United States and Japan, has experienced a significant decline in the share of national income that goes to labour. At the same time, labour shares in France and Italy have increased since the beginning of...

Suggested Citation

  • Bennet Berger & Guntram B. Wolff, 2017. "The global decline in the labour income share- is capital the answer to Germany’s current account surplus?," Policy Contributions 20285, Bruegel.
    • Handle: RePEc:bre:polcon:20285
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    1. Philip Du Caju & Erwan Gautier & Daphne Momferatu & Melanie Ward-Warmedinger, 2009. "Institutional Features of Wage Bargaining in 23 European Countries, the US and Japan," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 12(2), pages 57-108, Winter.
    2. Robert Z. Lawrence, 2015. "Recent Declines in Labor's Share in US Income: A Preliminary Neoclassical Account," Working Paper Series WP15-10, Peterson Institute for International Economics.
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    7. Sanvi Avouyi-Dovi & Denis Fougère & Erwan Gautier, 2013. "Wage Rigidity, Collective Bargaining, and the Minimum Wage: Evidence from French Agreement Data," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1337-1351, October.
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    Cited by:

    1. Klug, Thorsten & Mayer, Eric & Schuler, Tobias, 2022. "The corporate saving glut and the current account in Germany," Journal of International Money and Finance, Elsevier, vol. 121(C).
    2. Lucia Granelli & Martin Habet & Guergana Stanoeva & Gaetano D’Adamo & Robert Gampfer, 2020. "Puzzles in Non-Financial Corporate Sector Savings across the G20," European Economy - Economic Briefs 063, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Kyoji Fukao & Cristiano Perugini, 2021. "The Long‐Run Dynamics of the Labor Share in Japan," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 445-480, June.
    4. Anatolijs Prohorovs & Julija Bistrova, 2022. "Labour Share Convergence in the European Union," Economies, MDPI, vol. 10(9), pages 1-21, August.
    5. Landwehr, Jannik J., 2020. "The case for a job guarantee policy in Germany: A political-economic analysis of the potential benefits and obstacles," IPE Working Papers 150/2020, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    6. Damiani, Mirella & Pompei, Fabrizio & Andrea, Ricci, 2018. "Labour shares, employment protection and unions in European economies," MPRA Paper 91300, University Library of Munich, Germany.
    7. Mehmet Balcilar & Sahar Aghazadeh & George N Ike, 2021. "Modelling the employment, income and price elasticities of outbound tourism demand in OECD countries," Tourism Economics, , vol. 27(5), pages 971-990, August.
    8. Li, Shiyuan & Li, Yumin, 2021. "The Impact of Mobile Phone Adoption on Income Inequality," MPRA Paper 110969, University Library of Munich, Germany.
    9. Ivan D. TROFIMOV & Nazaria Md. ARIS & Muhammad Khairil Firdaus Bin ROSLI, 2018. "Macroeconomic determinants of the labour share of income: Evidence from OECD economies," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(616), A), pages 25-48, Autumn.
    10. Alessio Terzi, 2021. "Economic Policy-Making Beyond GDP An Introduction," European Economy - Discussion Papers 142, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    11. Monica Amici & Emmanuele Bobbio & Roberto Torrini, 2018. "Patterns of Convergence (Divergence) in the Euro Area: Profitability Versus Cost and Price Indicators," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 4(3), pages 367-384, November.
    12. Braun, Benjamin & Deeg, Richard, 2019. "Strong firms, weak banks: The financial consequences of Germany's export-led growth model," MPIfG Discussion Paper 19/5, Max Planck Institute for the Study of Societies.

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