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Labor Share Decline and the Capitalization of Intellectual Property Products

Author

Listed:
  • Yu Zheng

    (City University of Hong Kong)

  • Raul Santaeulalia

    (Washington University in St Louis)

  • Dongya Koh

    (University of Arkansas)

Abstract

We study the behavior of the US labor share over the past 65 years using new data from the post-2013 revision of the national income and product accounts and the fixed assets tables capitalizing intellectual property products (IPP). We find that IPP capital entirely explains the observed decline of the US labor share, which otherwise is secularly constant over the past 65 years for structures and equipment capital. The labor share decline simply reflects the fact that the US economy is undergoing a transition toward a larger IPP sector.

Suggested Citation

  • Yu Zheng & Raul Santaeulalia & Dongya Koh, 2015. "Labor Share Decline and the Capitalization of Intellectual Property Products," 2015 Meeting Papers 844, Society for Economic Dynamics.
  • Handle: RePEc:red:sed015:844
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    5. Cantore, Cristiano & Levine, Paul & Pearlman, Joseph & Yang, Bo, 2015. "CES technology and business cycle fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 61(C), pages 133-151.
    6. David Autor & David Dorn & Lawrence F. Katz & Christina Patterson & John Van Reenen, 2017. "Concentrating on the Fall of the Labor Share," American Economic Review, American Economic Association, vol. 107(5), pages 180-185, May.
    7. Matthew Chambers & Carlos Garriga & Don E. Schlagenhauf, 2016. "The Postwar Conquest of the Home Ownership Dream," Working Papers 2016-07, Towson University, Department of Economics, revised Apr 2016.
    8. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 3-69, Elsevier.
    9. Weicheng Lian, 2019. "Technological Changes, Offshoring, and the Labor Share," IMF Working Papers 2019/142, International Monetary Fund.
    10. Musa Orak, 2017. "Capital-Task Complementarity and the Decline of the U.S. Labor Share of Income," International Finance Discussion Papers 1200, Board of Governors of the Federal Reserve System (U.S.).
    11. Dominique Guellec, 2020. "Digital Innovation and the Distribution of Income," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 323-370, National Bureau of Economic Research, Inc.
    12. vom Lehn, Christian, 2018. "Understanding the decline in the U.S. labor share: Evidence from occupational tasks," European Economic Review, Elsevier, vol. 108(C), pages 191-220.
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    15. Brueckner, Markus, 2017. "Rent extraction by capitalists," European Journal of Political Economy, Elsevier, vol. 50(C), pages 157-170.
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    18. Gauti Eggertsson & Jacob Robbins, 2018. "Kaldor and Piketty's Facts: the Rise of Monopoly Power in the United States," 2018 Meeting Papers 77, Society for Economic Dynamics.

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