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The decline of labour share in OECD and non-OECD since the 1980s

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  • Kheng, Veasna
  • Mckinley, Justin
  • Pan, Lei

Abstract

This paper examines the causes of falling labour share in OECD and non-OECD countries since the 1980s. The results show that export and volatility are key drivers in OECD countries, but in non-OECD countries, the significant factors are financial openness and the capital’s relative price.

Suggested Citation

  • Kheng, Veasna & Mckinley, Justin & Pan, Lei, 2021. "The decline of labour share in OECD and non-OECD since the 1980s," MPRA Paper 110838, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:110838
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    References listed on IDEAS

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    1. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    2. Kang, Wensheng & Ratti, Ronald. A. & Vespignani, Joaquin, 2016. "Global uncertainty and the global economy: Decomposing the impact of uncertainty shocks," Working Papers 2016-01, University of Tasmania, Tasmanian School of Business and Economics.
    3. Ozturk, Ezgi O. & Sheng, Xuguang Simon, 2018. "Measuring global and country-specific uncertainty," Journal of International Money and Finance, Elsevier, vol. 88(C), pages 276-295.
    4. Chinn, Menzie D. & Ito, Hiro, 2006. "What matters for financial development? Capital controls, institutions, and interactions," Journal of Development Economics, Elsevier, vol. 81(1), pages 163-192, October.
    5. Michael Elsby & Bart Hobijn & Ayseful Sahin, 2013. "The Decline of the U.S. Labor Share," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(2 (Fall)), pages 1-63.
    6. Mai Dao & Ms. Mitali Das & Zsoka Koczan & Weicheng Lian, 2017. "Why Is Labor Receiving a Smaller Share of Global Income? Theory and Empirical Evidence," IMF Working Papers 2017/169, International Monetary Fund.
    7. Rikard Forslid & Toshihiro Okubo, 2016. "Big is Beautiful when Exporting," Review of International Economics, Wiley Blackwell, vol. 24(2), pages 330-343, May.
    8. David Autor & David Dorn & Lawrence F Katz & Christina Patterson & John Van Reenen, 2020. "The Fall of the Labor Share and the Rise of Superstar Firms [“Automation and New Tasks: How Technology Displaces and Reinstates Labor”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 645-709.
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    2. Bouazizi, Youssef & Oulmakki, Ouail & Savard, Luc & Verny, Jérôme, 2025. "The decline of the wage share in value-added: What have we learned from North African firms?," Structural Change and Economic Dynamics, Elsevier, vol. 72(C), pages 150-162.
    3. Kheng, Veasna & Pan, Lei & Fan, Xiaodong, 2025. "Human Capital: “Travel Broadens the Mind”," MPRA Paper 124156, University Library of Munich, Germany.
    4. Zhang, Hao & Wang, Feng & Fan, Wenna & Jiang, Hongfei & Ling, Rui & Liu, Juan, 2025. "Estimation of capital stock and the elasticity of capital-labor substitution in provincial industries in China," International Review of Economics & Finance, Elsevier, vol. 102(C).
    5. 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.

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    Keywords

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    JEL classification:

    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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