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A decomposition of the labor share decline in the US business sector

Author

Listed:
  • Guillaume Bazot

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • David Guerreiro

    (LED - Laboratoire d'Economie Dionysien - UP8 - Université Paris 8 Vincennes-Saint-Denis)

Abstract

Based on the calibration of a simple model, we decompose the decline in the labor share into four structural components: task displacement, labor rents, capital rents, and labor-capital substitution effect. Our estimation suggests that task displacement and the switch of distributed rents from labor to capital are the main drivers of the labor share decline over the past three decades. On the other hand, the neoclassical substitution effect seems not to have a long term impact on the labor share.

Suggested Citation

  • Guillaume Bazot & David Guerreiro, 2025. "A decomposition of the labor share decline in the US business sector," Working Papers hal-04928076, HAL.
    • Handle: RePEc:hal:wpaper:hal-04928076
    Note: View the original document on HAL open archive server: https://hal.science/hal-04928076v1
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