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The Determinants and Welfare Implications of Labor Share

Author

Listed:
  • An, Sungbae

    (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP))

  • Han, Minsoo

    (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP))

  • Kim, Subin

    (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP))

  • Lee, Jinhee

    (KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP))

Abstract

The decline in labor share is recognized as a global phenomenon. Concerns have been raised that this trend will exacerbate the income inequality between business owners as capitalists and households as the labor suppliers, prompting a decline in household income and consumption, which are major driving forces for sustainable growth. Meanwhile, various policy measures have been introduced to raise the labor share, with the aim of correcting inequality and boosting growth. This study explores the determinants of labor share and analyzes the effects of these factors on the economy and social welfare, offering various interpretations and policy alternatives according to economic conditions.

Suggested Citation

  • An, Sungbae & Han, Minsoo & Kim, Subin & Lee, Jinhee, 2021. "The Determinants and Welfare Implications of Labor Share," World Economy Brief 21-7, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwe:2021_007
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    Cited by:

    1. Rachel R. Cheti & Bahati Ilembo, 2021. "Vector Autoregressive Approach After First Differencing: A Time Series Analysis Of Inflation And Its Determinants In Tanzania," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 6(2), pages 43-56, September.

    More about this item

    Keywords

    labor share; welfare; income inequality; sustainable growth; economy; policy;
    All these keywords.

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