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Dividing the Pie

Author

Listed:
  • Michael Siegenthaler
  • Tobias Stucki

Abstract

The authors are the first to study the factors determining labor’s share of income on the level of the individual firm, employing an unusually informative panel data set. The empirical examination is concerned with Switzerland, which stands out as one of the very few developed countries with a stable labor share. Broadly confirming results from previous cross-country and industry-level studies, the authors find that the main factor decreasing the labor share between 2001 and 2010 was the increase in the firm’s share of workers using information and communication technology. The main reasons why Switzerland’s labor share remained almost constant are the counteracting effects of a relatively slow rate of technological progress in 1980 to 1995 and sectoral reallocation toward industries with above-average labor shares.

Suggested Citation

  • Michael Siegenthaler & Tobias Stucki, 2015. "Dividing the Pie," ILR Review, Cornell University, ILR School, vol. 68(5), pages 1157-1194, October.
    • Handle: RePEc:sae:ilrrev:v:68:y:2015:i:5:p:1157-1194
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    Citations

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    Cited by:

    1. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    2. Jean-Marie Grether & Benjamin Tissot-Daguette, 2021. "Zoom in, zoom out: A shift-share analysis of productivity in Switzerland based on micro data," IRENE Working Papers 21-10, IRENE Institute of Economic Research.
    3. Matej Bajgar & Giuseppe Berlingieri & Sara Calligaris & Chiara Criscuolo & Jonathan Timmis, 2019. "Industry concentration in Europe and North America," CEP Discussion Papers dp1654, Centre for Economic Performance, LSE.
    4. Esther Mirjam Girsberger & Miriam Rinawi & Matthias Krapf, 2018. "Wages and Employment: The Role of Occupational Skills," CESifo Working Paper Series 7114, CESifo.
    5. Siegenthaler Michael & Graff Michael & Mannino Massimo, 2016. "Characteristics and Drivers of the Swiss “Job Miracle”," Review of Economics, De Gruyter, vol. 67(1), pages 53-89, May.
    6. Chih‐Hai Yang & Meng‐Wen Tsou, 2021. "Globalization and the labor share in China: Firm‐level evidence," Manchester School, University of Manchester, vol. 89(1), pages 1-23, January.
    7. Bellocchi, Alessandro & Marin, Giovanni & Travaglini, Giuseppe, 2023. "The labor share puzzle: Empirical evidence for European countries," Economic Modelling, Elsevier, vol. 124(C).
    8. Corbellini, Aldo & Magnani, Marco & Morelli, Gianluca, 2021. "Labor market analysis through transformations and robust multivariate models," Socio-Economic Planning Sciences, Elsevier, vol. 73(C).
    9. Balsmeier, Benjamin & Woerter, Martin, 2019. "Is this time different? How digitalization influences job creation and destruction," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    10. Roya Taherifar & Mark J. Holmes & Gazi M. Hassan, 2023. "The drivers of labour share and impact on pay inequality: A firm-level investigation," Working Papers in Economics 23/03, University of Waikato.
    11. Kyoji Fukao & Koji Ito & Cristiano Perugini, 2019. "A Microeconomic Analysis of the Declining Labor Share in Japan," ADB Institute Series on Development Economics, in: Gary Fields & Saumik Paul (ed.), Labor Income Share in Asia, chapter 0, pages 247-267, Springer.
    12. Kraft, Kornelius & Lammers, Alexander, 2021. "Bargaining Power and the Labor Share - a Structural Break Approach," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242342, Verein für Socialpolitik / German Economic Association.
    13. Tobias Stucki & Daniel Wochner, 2019. "Technological and organizational capital: Where complementarities exist," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(3), pages 458-487, June.
    14. Girsberger, Esther Mirjam & Koomen, Miriam & Krapf, Matthias, 2022. "Interpersonal, cognitive, and manual skills: How do they shape employment and wages?," Labour Economics, Elsevier, vol. 78(C).
    15. Nicola Pensiero, 2022. "The effect of computerisation on the wage share in United Kingdom workplaces," The Economic and Labour Relations Review, , vol. 33(1), pages 158-177, March.
    16. Yang, Chih-Hai, 2023. "Competition in the Chinese market: Foreign firms and markups," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).
    17. Esther Mirjam Girsberger & Miriam Rinawi & Matthias Krapf, 2018. "Wages and employment: The role of occupational skills," Economics of Education Working Paper Series 0153, University of Zurich, Department of Business Administration (IBW).
    18. Adrjan, Pawel, 2018. "The mightier, the stingier: Firms’ market power, capital intensity, and the labor share of income," MPRA Paper 83925, University Library of Munich, Germany.

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