IDEAS home Printed from https://ideas.repec.org/p/iab/iabdpa/201728.html
   My bibliography  Save this paper

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

Author

Listed:
  • Carbonero, Francesco

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Offermanns, Christian J.
  • Weber, Enzo

    () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

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
    as

    Download full text from publisher

    File URL: http://doku.iab.de/discussionpapers/2017/dp2817.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Raurich, Xavier & Sala, Hector & Sorolla, Valeri, 2012. "Factor shares, the price markup, and the elasticity of substitution between capital and labor," Journal of Macroeconomics, Elsevier, vol. 34(1), pages 181-198.
    2. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
    3. Hobijn, Bart & Sahin, Aysegül, 2009. "Job-finding and separation rates in the OECD," Economics Letters, Elsevier, vol. 104(3), pages 107-111, September.
    4. Daron Acemoglu & David Autor, 2012. "What Does Human Capital Do? A Review of Goldin and Katz's The Race between Education and Technology," Journal of Economic Literature, American Economic Association, vol. 50(2), pages 426-463, June.
    5. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
    6. Carbonero, Francesco & Gartner, Hermann, 2017. "Inspecting the relation of search cost and search duration for new hires," FAU Discussion Papers in Economics 21/2017, Friedrich-Alexander University Erlangen-Nuremberg, Institute for Economics.
    7. Brunow, Stephan & Birkeneder, Antonia & Rodriguez-Pose, Andrés, 2017. "Creative and science oriented employees and firm innovation : a key for smarter cities?," IAB Discussion Paper 201724, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    8. Alfonso Arpaia & Esther Pérez & Karl Pichelmann, 2009. "Understanding Labour Income Share Dynamics in Europe," European Economy - Economic Papers 2008 - 2015 379, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    9. Brixy, Udo & Brunow, Stephan & D''Ambrosio, Anna, 2017. "Ethnic diversity in start-ups and its impact on innovation," IAB Discussion Paper 201725, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    11. Nicholas Kaldor, 1955. "Alternative Theories of Distribution," Review of Economic Studies, Oxford University Press, vol. 23(2), pages 83-100.
    12. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, Oxford University Press, vol. 129(1), pages 61-103.
    13. Christian M. Dahl & Daniel le Maire & Jakob R. Munch, 2013. "Wage Dispersion and Decentralization of Wage Bargaining," Journal of Labor Economics, University of Chicago Press, vol. 31(3), pages 501-533.
    14. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    15. Ipsita Roy & Davide Consoli, 2018. "Employment Polarization in Germany: Role of Technology, Trade and Human Capital," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 251-279, June.
    16. Bach, Ruben & Eckman, Stephanie, 2017. "Does participating in a panel survey change respondents' labor market behavior?," IAB Discussion Paper 201715, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    17. Olympia Bover & Manuel Arellano & Samuel Bentolila, 2002. "Unemployment Duration, Benefit Duration and the Business Cycle," Economic Journal, Royal Economic Society, vol. 112(479), pages 223-265, April.
    18. Samuel Muehlemann & Harald Pfeifer, 2016. "The Structure of Hiring Costs in Germany: Evidence from Firm-Level Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(2), pages 193-218, April.
    19. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages 374-403, June.
    20. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    21. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.),Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    22. Hutter, Christian & Weber, Enzo, 2017. "Labour market effects of wage inequality and skill-biased technical change in Germany," IAB Discussion Paper 201705, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    23. Bruce Fallick & Charles A. Fleischman, 2004. "Employer-to-employer flows in the U.S. labor market: the complete picture of gross worker flows," Finance and Economics Discussion Series 2004-34, Board of Governors of the Federal Reserve System (U.S.).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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].
    2. Carbonero, Francesco. & Ernst, Ekkehard & Weber, Enzo., 2018. "Robots worldwide the impact of automation on employment and trade," ILO Working Papers 995008793402676, International Labour Organization.

    More about this item

    Keywords

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

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iab:iabdpa:201728. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (IAB, Geschäftsbereich Wissenschaftliche Fachinformation und Bibliothek). General contact details of provider: http://edirc.repec.org/data/iabbbde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.