IDEAS home Printed from https://ideas.repec.org/p/oec/ecoaaa/1541-en.html
   My bibliography  Save this paper

Labour share developments over the past two decades: The role of public policies

Author

Listed:
  • Mathilde Pak
  • Cyrille Schwellnus

Abstract

Labour share developments over the past two decades have differed widely across OECD countries, with about half of them experiencing significant declines. This paper analyses the role of public policies in shaping labour share developments across countries. The results suggest that pro-competition product market reforms raise the labour share by reducing producer rents. Labour market reforms that strengthen the bargaining position of workers, such as tightening employment protection or raising minimum wages, may raise wages in the short term but risk triggering the substitution of capital for labour in the medium term. On average, across countries, such reforms are estimated to reduce the labour share. By contrast, promoting the re-employment of workers who lose their jobs through active labour market policies unambiguously raises the labour share.

Suggested Citation

  • Mathilde Pak & Cyrille Schwellnus, 2019. "Labour share developments over the past two decades: The role of public policies," OECD Economics Department Working Papers 1541, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:1541-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/b21e518b-en
    Download Restriction: no

    More about this item

    Keywords

    difference-in-differences estimation; labour share; public policies;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:oec:ecoaaa:1541-en. 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: (). General contact details of provider: http://edirc.repec.org/data/edoecfr.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.

    We have no references for this item. You can help adding them by using 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.