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The fall of the labour income share: the role of technological change and imperfect labour markets

Author

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  • Carbonero, Francesco

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Offermanns, Christian J.

    (Deutsche Bundesbank)

  • Weber, Enzo

    (Institute for Employment Research (IAB), Nuremberg, Germany ; University of Regensburg)

Abstract

"The non-constancy of factor shares is drawing the attention of many researchers. We document an average drop of the labour share of 8 percentage points for eight European countries and the US between 1980 and 2007. We investigate theoretically and empirically two mechanisms: the substitution between Information Communication Technology (ICT) and labour and the presence of hiring costs. We find that the ICT-labour replacement is a promising channel to explain the decline of the labour share, though labour market frictions takes part of its explanatory power over. In particular, hiring costs have a bigger role in Europe than in the US. Finally, by modelling the elasticity of substitution between ICT and labour as a function of institutional and structural variables, we find that it correlates with the share of routine occupations (positively) and with the share of high-skill workers (negatively)." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Carbonero, Francesco & Offermanns, Christian J. & Weber, Enzo, 2017. "The fall of the labour income share: the role of technological change and imperfect labour markets," IAB-Discussion Paper 201728, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201728
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    Cited by:

    1. Carbonero, Francesco. & Ernst, Ekkehard & Weber, Enzo., 2018. "Robots worldwide the impact of automation on employment and trade," ILO Working Papers 995008793402676, International Labour Organization.
    2. Osiander, Christopher & Stephan, Gesine, 2018. "Unter welchen Bedingungen würden sich Beschäftigte weiterbilden? : Ergebnisse eines faktoriellen Surveys," IAB-Discussion Paper 201804, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Gómez-Plana Antonio G. & Latorre María C., 2019. "Digitalization, Multinationals and Employment: An Empirical Analysis of Their Causal Relationships," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 239(3), pages 399-439, June.
    4. Hutter, Christian & Weber, Enzo, 2021. "Labour market miracle, productivity debacle: Measuring the effects of skill-biased and skill-neutral technical change," Economic Modelling, Elsevier, vol. 102(C).

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Dänemark ; Frankreich ; Irland ; Italien ; Niederlande ; Österreich ; Spanien ; USA ; Auswirkungen ; Auswirkungen ; Beschäftigungseffekte ; Einkommensverteilung ; internationaler Vergleich ; Kosten ; Lohnquote ; Personalbeschaffung ; Personaleinstellung ; qualifikationsspezifische Faktoren ; Substitutionseffekte ; Substitutionselastizität ; technischer Wandel ; 1980-2007;
    All these keywords.

    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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