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On Labour Shares in Recent Decades: A Survey

Author

Listed:
  • Luciano Boggio

    (DISCE, Università Cattolica di Milano)

  • Vincenzo Dall'Aglio

    (Università di Parma)

  • Marco Magnani

    (Università di Parma)

Abstract

We survey the rich literature studying the behaviour of labor shares in recent decades. To explain their dynamics – the main feature being the decline of European and American shares starting in the 1980s – such literature considers models that use either neoclassical or Leontief-type production functions, with both perfectly competitive markets and monopolistic competition coupled by bargaining between firms and workers. These empirical studies in general have produced results that are scarcely robust. However, they suggest that technical change has a negative and significant impact on the labor share. Evidence for a negative effect of globalization variables is clearly brought out for developing countries, whilst for advanced countries, this effect finds less support. Also, they show that product and labor market regulation issues have mixed effects on the labor share. An alternative to the econometric explanation of labor share is given in the final section.

Suggested Citation

  • Luciano Boggio & Vincenzo Dall'Aglio & Marco Magnani, 2009. "On Labour Shares in Recent Decades: A Survey," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq0957, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    • Handle: RePEc:ctc:serie6:itemq0957
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    Cited by:

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    3. Enrico Bellino, 2012. "Pasinetti on Ricardo," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq1258, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    4. Parisi, Maria Laura, 2017. "Labor market rigidity, social policies and the labor share: Empirical evidence before and after the big crisis," Economic Systems, Elsevier, vol. 41(4), pages 492-512.
    5. Carlo V. FIORIO & Simon MOHUN & Roberto VENEZIANI, 2013. "Social Democracy and Distributive Conflict in the UK, 1950-2010," Departmental Working Papers 2013-09, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 16 May 2013.
    6. Taining Wang & Jinjing Tian, 2020. "Recasting the trade impact on labor share: a fixed-effect semiparametric estimation study," Empirical Economics, Springer, vol. 58(5), pages 2465-2511, May.
    7. Stefano Colombo & Luigi Filippini, 2012. "Product innovation and logistic optimization in a novel urban-type model," DISCE - Quaderni dell'Istituto di Teoria Economica e Metodi Quantitativi itemq1259, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

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    More about this item

    Keywords

    Factor Shares; Functional Income Distribution;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

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