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Revisiting the Global Decline of the (Non-Housing) Labor Share

Author

Listed:
  • German Gutierrez

    (New York University)

  • Sophie Piton

    (Bank of England
    Centre for Macroeconomics (CFM))

Abstract

We show that cross-country comparisons of corporate labor shares are affected by differences in the delineation of corporate sectors. While the US excludes all self-employed and most dwellings from the corporate sector, other countries include large amounts of both - biasing labor shares downwards. We propose two methods to control for these differences and obtain 'harmonized' nonhousing labor share series. Contrary to common wisdom, the harmonized series remain stable across all major economies except the US, where the labor share still declines, primarily due to manufacturing. These new facts cast doubts on most technological explanations for the labor share decline.

Suggested Citation

  • German Gutierrez & Sophie Piton, 2019. "Revisiting the Global Decline of the (Non-Housing) Labor Share," Discussion Papers 1913, Centre for Macroeconomics (CFM).
    • Handle: RePEc:cfm:wpaper:1913
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    More about this item

    Keywords

    Labour share; Residential real estate; Self-employment; National accounts;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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