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Capital's Grabbing Hand? A Cross-Country/Cross-Industry Analysis of the Decline of the Labour Share


  • Andrea Bassanini


  • Thomas Manfredi



We examine the determinants of the within-industry decline of the labour share, using industry-level annual data for 25 OECD countries, 20 business-sector industries and covering up to 28 years. We find that total factor productivity growth – which captures (albeit imprecisely) capital-augmenting or labour-replacing technical change – and capital deepening jointly account for as much as 80% of the within-industry contraction of the labour share. We also find that other important factors are privatisation of state-owned enterprises and the increase in international competition as well as off-shoring of intermediate stages of the production process. By contrast, we are unable to detect any effect from increases in domestic competition brought about by entry deregulation. Nous examinons les déterminants du recul intrasectoriel de la part du travail, en utilisant des données sectorielles pour 25 pays de l’OCDE et 20 secteurs marchands sur une période couvrant jusqu’à 28 années. Nous trouvons que la croissance de la productivité totale des facteurs – qui peut représenter le progrès technique qui augmente la productivité du capital ou remplace le facteur travail – et l’accroissement de l’intensité capitalistique ont représenté ensemble à peu près 80 % de la diminution intrasectorielle moyenne de la part du travail dans les pays de l’OCDE. Nous trouvons aussi que d’autres facteurs importants sont la privatisation des entreprises publiques dans le secteur marchand ainsi que l’accroissement de la concurrence internationale et des délocalisations à l’étranger de la production de biens intermédiaires. Par contre, nous ne pouvons pas détecter un quelconque effet de l’accroissement de la concurrence intérieure résultant de la déréglementation de l’entrée sur les marchés des produits.

Suggested Citation

  • Andrea Bassanini & Thomas Manfredi, 2012. "Capital's Grabbing Hand? A Cross-Country/Cross-Industry Analysis of the Decline of the Labour Share," OECD Social, Employment and Migration Working Papers 133, OECD Publishing.
  • Handle: RePEc:oec:elsaab:133-en

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    References listed on IDEAS

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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Why has the labor income share declined?
      by Economic Logician in Economic Logic on 2012-09-17 19:50:00
    2. [経済]なぜ労働分配率は下がったのか?
      by himaginary in himaginaryの日記 on 2012-09-21 12:00:00


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    Cited by:

    1. Olivier Giovannoni, 2014. "What Do We Know About the Labor Share and the Profit Share? Part III: Measures and Structural Factors," Economics Working Paper Archive wp_805, Levy Economics Institute.
    2. repec:clr:wugarc:y:2016v:42i:4p:557 is not listed on IDEAS
    3. Onaran, Özlem & Guschanski, Alexander, 2016. "The political economy of income distribution: industry level evidence from Austria," Greenwich Papers in Political Economy 15865, University of Greenwich, Greenwich Political Economy Research Centre.
    4. Jakob B. Madsen & Antonio Minniti & Francesco Venturini, 2015. "Assessing Piketty’s laws of capitalism," Monash Economics Working Papers 34-15, Monash University, Department of Economics.
    5. repec:spr:eurasi:v:4:y:2014:i:1:p:3-30 is not listed on IDEAS
    6. Erik Bengtsson, 2014. "Labour's share in twentieth-century Sweden: a reinterpretation," Scandinavian Economic History Review, Taylor & Francis Journals, vol. 62(3), pages 290-314, November.
    7. Thor Berger & Carl Benedikt Frey, 2016. "Structural Transformation in the OECD: Digitalisation, Deindustrialisation and the Future of Work," OECD Social, Employment and Migration Working Papers 193, OECD Publishing.
    8. Declan Trott, 2013. "Why Has Wage Inequality Risen Most Where Wage Shares Have Fallen Least?," CEPR Discussion Papers 685, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    9. Giovanni Bonifati, 2014. "Investimenti, consumi e occupazione. Capacità produttiva, domanda effettiva e distribuzione del reddito nel lungo periodo," Department of Economics 0046, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".

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    JEL classification:

    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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