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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.

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Paper provided by OECD Publishing in its series OECD Social, Employment and Migration Working Papers with number 133.

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Date of creation: 04 Jul 2012
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Handle: RePEc:oec:elsaab:133-en
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