Explaining movements in the labor share

Samuel Bentolila and Gilles Saint-Paul

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: In this paper we study the evolution of the labor share in the OECD since 1970. We show it is essentially related to the capital-output ratio; that this relationship is shifted by factors like the price of imported materials or the skill mix; and that discrepancies between the marginal product of labor and the real wage (due to, e.g., product market power, union bargaining, and labor adjustment costs) cause departures from it. We provide estimates of the model with panel data on 14 industries and 14 countries for 1973-93 and use them to compute the evolution of the wage gap in Germany and the US.

Keywords: Labor share; capital-output ratio (search for similar items in EconPapers)
JEL-codes: E25 J30 (search for similar items in EconPapers)
Date: 1999-04
New Economics Papers: this item is included in nep-lab and nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Related works:
Journal Article: Explaining Movements in the Labor Share (2003)
Working Paper: Explaining Movements in the Labor Share (1999)
Working Paper: Explaining Movements in the Labor Share (1999)
Working Paper: Explaining Movements in the Labour Share (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:374

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