IDEAS home Printed from https://ideas.repec.org/a/nse/ecosta/ecostat_2019_510t_4.html
   My bibliography  Save this article

Labour Share Developments in OECD Countries Over the Past Two Decades

Author

Listed:
  • Mathilde Pak
  • Pierre-Alain Pionnier
  • Cyrille Schwellnus

Abstract

[eng] Over the past two decades, real wage growth in many OECD countries has decou¬pled from labour productivity growth, as labour income shares have declined. This paper analyses the drivers of labour share developments using a combination of industry- and firm-level data. Technological change in the investment goods-producing sector and greater global value chain participation have compressed labour shares, but the effect of technological change has been significantly less pronounced for high-skilled workers. Countries with falling labour shares have witnessed both a decline at the technological frontier and a reallocation of market shares toward “superstar” firms with low labour shares. The decline at the technological frontier mainly reflects the entry of firms with low labour shares into the frontier rather than a decline of labour shares in incumbent frontier firms, suggesting that thus far this process is mainly explained by technological dynamism rather than anti-competitive forces.

Suggested Citation

  • Mathilde Pak & Pierre-Alain Pionnier & Cyrille Schwellnus, 2019. "Labour Share Developments in OECD Countries Over the Past Two Decades," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 510-511-5, pages 17-34.
    • Handle: RePEc:nse:ecosta:ecostat_2019_510t_4
    DOI: https://doi.org/10.24187/ecostat.2019.510t.1992
    as

    Download full text from publisher

    File URL: https://www.insee.fr/en/statistiques/fichier/4253019/510_511_512_Pak_Pionnier_Schwellnus_EN.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.24187/ecostat.2019.510t.1992?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lordan, Grace & Neumark, David, 2018. "People versus machines: The impact of minimum wages on automatable jobs," Labour Economics, Elsevier, vol. 52(C), pages 40-53.
    2. Pierre-Alain Pionnier & Emmanuelle Guidetti, 2015. "Comparing profit shares in value-added in four OECD countries: Towards more harmonised national accounts," OECD Statistics Working Papers 2015/3, OECD Publishing.
    3. 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.
    4. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    5. Mathilde Pak & Cyrille Schwellnus, 2019. "Labour share developments over the past two decades: The role of public policies," OECD Economics Department Working Papers 1541, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Caroline Buts & Ellen Van Droogenbroeck & Michaël R. J. Dooms & Kim Willems, 2020. "The Economic Impact of Standards in Belgium," International Journal of Standardization Research (IJSR), IGI Global, vol. 18(1), pages 44-64, January.
    2. Philippe Askenazy, 2022. "Worker surveillance capital, labour share, and productivity [Workplace surveillance: an overview]," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 85-93.
    3. Philippe Askenazy, 2020. "Worker surveillance capital, labour share and productivity [Surveillance des travailleurs, partage de valeur ajoutée et productivité]," Working Papers hal-02877703, HAL.
    4. Arif, Imran, 2021. "Productive knowledge, economic sophistication, and labor share," World Development, Elsevier, vol. 139(C).
    5. Mary O’Mahony & Michela Vecchi & Francesco Venturini, 2021. "Capital Heterogeneity and the Decline of the Labour Share," Economica, London School of Economics and Political Science, vol. 88(350), pages 271-296, April.
    6. Anatolijs Prohorovs & Julija Bistrova, 2022. "Labour Share Convergence in the European Union," Economies, MDPI, vol. 10(9), pages 1-21, August.

    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. Basso, Henrique S. & Jimeno, Juan F., 2021. "From secular stagnation to robocalypse? Implications of demographic and technological changes," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 833-847.
    2. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    3. Cyrille Schwellnus & Andreas Kappeler & Pierre-Alain Pionnier, 2017. "The Decoupling of Median Wages from Productivity in OECD Countries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 32, pages 44-60, Spring.
    4. Koopman, Eline & Wacker, Konstantin M., 2023. "Drivers of growth accelerations: What role for capital accumulation?," World Development, Elsevier, vol. 169(C).
    5. Alessandro Bellocchi & Giovanni Marin & Giuseppe Travaglini, 2021. "The Great Fall of Labor Share:Micro Determinants for EU Countries Over 2011-2019," Working Papers 2102, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2021.
    6. Maarek, Paul & Moiteaux, Elliot, 2021. "Polarization, employment and the minimum wage: Evidence from European local labor markets," Labour Economics, Elsevier, vol. 73(C).
    7. Gilbert Cette & Lorraine Koehl & Thomas Philippon, 2019. "Labor Shares in Some Advanced Economies," NBER Working Papers 26136, National Bureau of Economic Research, Inc.
    8. Germán Gutiérrez & Sophie Piton, 2020. "Revisiting the Global Decline of the (Non-housing) Labor Share," American Economic Review: Insights, American Economic Association, vol. 2(3), pages 321-338, September.
    9. Ugur, Mehmet, 2024. "Innovation, market power and the labour share: Evidence from OECD industries," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    10. Yuci Chen, 2019. "What Do Establishments Do When Wages Increase? Evidence from Minimum Wages in the United States," Working Papers 19-31, Center for Economic Studies, U.S. Census Bureau.
    11. Mary O’Mahony & Michela Vecchi & Francesco Venturini, 2021. "Capital Heterogeneity and the Decline of the Labour Share," Economica, London School of Economics and Political Science, vol. 88(350), pages 271-296, April.
    12. Anderton, Robert & Jarvis, Valerie & Labhard, Vincent & Morgan, Julian & Petroulakis, Filippos & Vivian, Lara, 2020. "Virtually everywhere? Digitalisation and the euro area and EU economies," Occasional Paper Series 244, European Central Bank.
    13. Arif, Imran, 2021. "Productive knowledge, economic sophistication, and labor share," World Development, Elsevier, vol. 139(C).
    14. Dongya Koh & Raül Santaeulàlia-Llopis, 2017. "Countercyclical Elasticity of Substitution," Working Papers 946, Barcelona School of Economics.
    15. Cooray, Arusha, 2011. "The role of the government in financial sector development," Economic Modelling, Elsevier, vol. 28(3), pages 928-938, May.
    16. Campbell, Randall C. & Nagel, Gregory L., 2016. "Private information and limitations of Heckman's estimator in banking and corporate finance research," Journal of Empirical Finance, Elsevier, vol. 37(C), pages 186-195.
    17. Ensar Yılmaz & Zeynep Kaplan, 2022. "Heterogeneity of market power: firm-level evidence," Economic Change and Restructuring, Springer, vol. 55(2), pages 1207-1228, May.
    18. Herrera, Santiago, 2000. "Determinantes y composición del endeudamiento público en Colombia," IDB Publications (Working Papers) 2110, Inter-American Development Bank.
    19. Thomas A. Garrett & Russell S. Sobel, 2004. "State Lottery Revenue: The Importance of Game Characteristics," Public Finance Review, , vol. 32(3), pages 313-330, May.
    20. Mehzabin Tuli, Farzana & Mitra, Suman & Crews, Mariah B., 2021. "Factors influencing the usage of shared E-scooters in Chicago," Transportation Research Part A: Policy and Practice, Elsevier, vol. 154(C), pages 164-185.

    More about this item

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    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:nse:ecosta:ecostat_2019_510t_4. See general information about how to correct material in RePEc.

    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: Veronique Egloff (email available below). General contact details of provider: https://edirc.repec.org/data/inseefr.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.