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Perspectives on the Labor Share

Author

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  • Loukas Karabarbounis

Abstract

As of 2022, the share of U.S. income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the economic and policy implications of the labor share decline.

Suggested Citation

  • Loukas Karabarbounis, 2023. "Perspectives on the Labor Share," NBER Working Papers 31854, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:31854
    Note: EFG IO LS
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    Cited by:

    1. is not listed on IDEAS
    2. Simcha Barkai & Surech Nallareddy & Maria Ogneva, 2025. "Capitalization of Intellectual Property Products Does Not Explain the Decline in the Labor Share," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 56, April.
    3. Bandyopadhyay, Sujan & Ferraro, Domenico, 2025. "Persistence of labor share fluctuations and overshooting," Journal of Economic Dynamics and Control, Elsevier, vol. 180(C).
    4. Schiozer, Nikolas & Lima, Gilberto Tadeu & Alexandre, Michel, 2026. "Heterogeneity in pricing behavior in hybrid DSGE-ABM macrodynamics," Economic Modelling, Elsevier, vol. 155(C).
    5. David H. Autor & Caroline Chin & Anna Salomons & Bryan Seegmiller, 2026. "What Makes New Work Different from More Work?," CESifo Working Paper Series 12577, CESifo.
    6. Jiyoon Oh, 2025. "The Micro-Level Anatomy of Korea’s Rising Labor Share," Korean Economic Review, Korean Economic Association, vol. 41, pages 175-210.
    7. Hennessy, David A., 2025. "Information as a catalyst for industrialization," Journal of Economic Behavior & Organization, Elsevier, vol. 230(C).
    8. David Autor & B. N. Kausik, 2026. "Resolving the automation paradox: falling labor share, rising wages," Papers 2601.06343, arXiv.org.
    9. Garibaldi, Pietro & Turri, Enrico D., 2024. "Monopsony in Growth Theory," IZA Discussion Papers 17392, IZA Network @ LISER.
    10. Cheng, Rui & Li, Jing & Wu, Ting, 2024. "Competition policy and labor income share: Evidence from the antitrust policy in China," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 966-977.
    11. Masayuki MORIKAWA, 2025. "Are Productivity and Wages Decoupling in Japan? Divergence between macro and micro relationships," Discussion papers 25106, Research Institute of Economy, Trade and Industry (RIETI).

    More about this item

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E0 - Macroeconomics and Monetary Economics - - General
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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