IDEAS home Printed from https://ideas.repec.org/p/zbw/glodps/324.html
   My bibliography  Save this paper

The Evolution of Factor Shares: Evidence from Switzerland

Author

Listed:
  • Baldi, Guido
  • Pons, Martina

Abstract

While the labor share of income has decreased in most advanced economies since the 1980s, it has remained relatively stable in Switzerland. However, this does not imply that the capital share of income has also remained stable. Our results suggest that the share of imputed capital rental payments to income has decreased. Similar to other countries, Switzerland has seen an increase in the so-called factorless income share that cannot be readily attributed to capital and labor. The increase in factorless income may re ect a rise in economic rents, higher compensation for business risks, or increased compensation for unmeasured input factors, especially intangible capital. We find that the stable labor share in Switzerland cannot be traced back to high wage growth, but rather to subdued investment growth and a high growth rate of the labor force.

Suggested Citation

  • Baldi, Guido & Pons, Martina, 2019. "The Evolution of Factor Shares: Evidence from Switzerland," GLO Discussion Paper Series 324, Global Labor Organization (GLO).
  • Handle: RePEc:zbw:glodps:324
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/193169/1/GLO-DP-0324.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bentolila Samuel & Saint-Paul Gilles, 2003. "Explaining Movements in the Labor Share," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-33, October.
    2. Antràs Pol, 2004. "Is the U.S. Aggregate Production Function Cobb-Douglas? New Estimates of the Elasticity of Substitution," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-36, April.
    3. Reto Föllmi & Angela Fuest & Philipp an de Meulen & Martin Micheli & Torsten Schmidt & Lina Zwick, 2018. "Openness and productivity of the Swiss economy," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 154(1), pages 1-21, December.
    4. Edward J. Balistreri & Christine A. McDaniel & Eina Vivian Wong, 2003. "An Estimation of U.S. Industry-Level Capital-Labor Substitution," Computational Economics 0303001, University Library of Munich, Germany.
    5. Rainer Klump & Peter McAdam & Alpo Willman, 2007. "Factor Substitution and Factor-Augmenting Technical Progress in the United States: A Normalized Supply-Side System Approach," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 183-192, February.
    6. Taehyoung Cho & Soobin Hwang & Paul Schreyer, 2017. "Has the Labour Share Declined?: It Depends," OECD Statistics Working Papers 2017/1, OECD Publishing.
    7. Ms. Mitali Das & Weicheng Lian & Zsoka Koczan & Mai Chi Dao, 2017. "Why Is Labor Receiving a Smaller Share of Global Income? Theory and Empirical Evidence," IMF Working Papers 2017/169, International Monetary Fund.
    8. Balistreri, Edward J. & McDaniel, Christine A. & Wong, Eina Vivian, 2003. "An estimation of US industry-level capital-labor substitution elasticities: support for Cobb-Douglas," The North American Journal of Economics and Finance, Elsevier, vol. 14(3), pages 343-356, December.
    9. Barbara Rudolf & Mathias Zurlinden, 2009. "Measuring Capital Stocks and Capital Services in Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 145(I), pages 61-105, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Knoblach, Michael & Rößler, Martin & Zwerschke, Patrick, 2016. "The Elasticity of Factor Substitution Between Capital and Labor in the U.S. Economy: A Meta-Regression Analysis," CEPIE Working Papers 03/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    2. Paolo E. Giordani & Michele Ruta, 2011. "The Immigration Policy Puzzle," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 922-935, November.
    3. Florian Brugger & Christian Gehrke, 2017. "The Neoclassical Approach to Induced Technical Change: From Hicks to Acemoglu," Metroeconomica, Wiley Blackwell, vol. 68(4), pages 730-776, November.
    4. Young, Andrew T., 2013. "U.S. Elasticities Of Substitution And Factor Augmentation At The Industry Level," Macroeconomic Dynamics, Cambridge University Press, vol. 17(4), pages 861-897, June.
    5. Robert Z. Lawrence, 2015. "Recent Declines in Labor's Share in US Income: A Preliminary Neoclassical Account," Working Paper Series WP15-10, Peterson Institute for International Economics.
    6. Gã“Mez, Manuel A., 2008. "Dynamics Of The Saving Rate In The Neoclassical Growth Model With Ces Production," Macroeconomic Dynamics, Cambridge University Press, vol. 12(2), pages 195-210, April.
    7. Xu, Xiang & Li, David Daokui & Zhao, Mofei, 2018. "“Made in China” matters: Integration of the global labor market and the global labor share decline," China Economic Review, Elsevier, vol. 52(C), pages 16-29.
    8. P. Capros & Denise Van Regemorter & Leonidas Paroussos & P. Karkatsoulis & C. Fragkiadakis & S. Tsani & I. Charalampidis & Tamas Revesz, 2013. "GEM-E3 Model Documentation," JRC Working Papers JRC83177, Joint Research Centre (Seville site).
    9. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    10. Francisco Alvarez-Cuadrado & Ngo Van Long & Markus Poschke, 2016. "Capital-Labor Substitution, Structural Change and Growth," CESifo Working Paper Series 5928, CESifo.
    11. Lawrence E. Blume & Steven N. Durlauf, 2015. "Capital in the Twenty-First Century: A Review Essay," Journal of Political Economy, University of Chicago Press, vol. 123(4), pages 749-777.
    12. Michal Antoszewski, 2017. "Panel estimation of sectoral substitution elasticities for CES production functions," EcoMod2017 10160, EcoMod.
    13. Wei, Taoyuan & Liu, Yang, 2019. "Estimation of resource-specific technological change," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 29-33.
    14. Sauquet, Alexandre & Lecocq, Franck & Delacote, Philippe & Caurla, Sylvain & Barkaoui, Ahmed & Garcia, Serge, 2011. "Estimating Armington elasticities for sawnwood and application to the French Forest Sector Model," Resource and Energy Economics, Elsevier, vol. 33(4), pages 771-781.
    15. Fachin, Stefano & Gavosto, Andrea, 2007. "The decline in Italian productivity: a study in estimation of long-Run trends in Total Factor Productivity with panel cointegration methods," MPRA Paper 3112, University Library of Munich, Germany.
    16. Espinoza, Raphael & Ostry, Jonathan D. & Papageorgiou, Chris, 2019. "The Armistice of the Sexes: Gender Complementarities in the Production Function," CEPR Discussion Papers 13792, C.E.P.R. Discussion Papers.
    17. Davide Furceri & Mr. Romain A Duval & Gabriele Ciminelli, 2018. "Employment Protection Deregulation and Labor Shares in Advanced Economies," IMF Working Papers 2018/186, International Monetary Fund.
    18. Gregory Casey & Ryo Horii, 2019. "A Multi-factor Uzawa Growth Theorem and Endogenous Capital-Augmenting Technological Change," ISER Discussion Paper 1051, Institute of Social and Economic Research, Osaka University.
    19. Luisito BERTINELLI & Olivier CARDI & Romain RESTOUT, 2018. "Labor Market Effects of Technology Shocks BiasedToward the Traded Sector," LEO Working Papers / DR LEO 2586, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    20. Alvarez-Cuadrado, Francisco & Long, Ngo Van & Poschke, Markus, 2018. "Capital-labor substitution, structural change and the labor income share," Journal of Economic Dynamics and Control, Elsevier, vol. 87(C), pages 206-231.

    More about this item

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:glodps:324. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/glabode.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/glabode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.