Revisiting the global decline of the (non-housing) labor share

Staff working papers set out research in progress by our staff, with the aim of encouraging comments and debate.
Published on 19 July 2019

Staff Working Paper No. 811

By Germán Gutiérrez and Sophie Piton
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’ non-housing 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.

PDFRevisiting the global decline of the (non-housing) labor share

Was this page useful?
Add your details...