Found 4 article(s) for author 'Labor Share'

The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration

The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration. Elhanan Helpman, October 2017, Paper, “We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early post-war period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the US labor share.Link

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The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration

The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration. Elhanan Helpman, September 2017, Paper, “We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early postwar period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the U.S. labor share.Link

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Concentrating on the Fall of the Labor Share

Concentrating on the Fall of the Labor Share. Lawrence Katz, April 2017, Paper, “In this paper, we discuss an explanation for the fall in share of labour in GDP based on the rise of “superstar firms.” If globalization or technological changes advantage the most productive firms in each industry, product market concentration will rise as industries become increasingly dominated by superstar firms with high profit margins and a low share of labor in firm value-added and sales. As the importance of superstar firms increases, the aggregate labour share will fall. This hypothesis suggests that sales will increasingly concentrate in a small number of firms and that industries where concentration rises most will have the largest declines in the labour share. We find support for these predictions aggregating up micro-data from the US Census 1982-2012.Link

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Recent Declines in Labor’s Share in US Income: A Preliminary Neoclassical Account

Recent Declines in Labor’s Share in US Income: A Preliminary Neoclassical Account. Robert Lawrence, June 2015, Paper. “As shown in the 1930s by Hicks and Robinson, the elasticity of substitution is a key parameter that captures whether capital and labor are gross complements or substitutes. Establishing the magnitude of s is vital, not only for explaining changes in the distribution of income between factors but also for undertaking policy measures to influence it. Several papers have explained the recent decline in labor’s share in income by claiming that (elasticity of substitution) is greater than 1 and that there has been capital deepening…” Link

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