A BEJM Contributions article.

Abstract

In this paper we study the evolution of the labor share in the OECD. We show it is essentially related to the capital-output ratio; that this relationship is shifted by factors like the price of imported materials or capital-augmenting technological progress; and that discrepancies between the marginal product of labor and the real wage ---due to, e.g., labor adjustment costs or union wage bargaining--- cause departures from it. We also provide empirical evidence on the determinants of the labor share with panel data on 13 industries and 12 countries for 1972-93.

Submitted: January 28, 2003 · Accepted: September 30, 2003 · Published: October 3, 2003

Originally published in Contributions to Macroeconomics.

Recommended Citation

Bentolila, Samuel and Saint-Paul, Gilles (2003) "Explaining Movements in the Labor Share," Contributions to Macroeconomics: Vol. 3 : Iss. 1, Article 9.
Available at: http://www.bepress.com/bejm/contributions/vol3/iss1/art9