Explaining Movements in the Labour Share

Samuel Bentolila () and Gilles Saint-Paul ()

No 1958, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In this paper we study the evolution of the labour share in the OECD since 1970. We present a theoretical model showing that it is essentially related to the capital-output ratio; that this relationship is shifted by factors like the price of imported materials or the skill mix; and that discrepancies between the marginal product of labour and the real wage (due to, e.g. product market power, union bargaining, and labour adjustment costs) cause departures from it. We estimate the model with panel data on 15 industries and 14 countries for 1973-93 and derive the evolution of the wage gap in Germany and the United States.

Keywords: capital-output ratio; labour share (search for similar items in EconPapers)
JEL-codes: E25 J30 (search for similar items in EconPapers)
Date: 1998-09
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Related works:
Journal Article: Explaining Movements in the Labor Share (2003)
Working Paper: Explaining Movements in the Labor Share (1999)
Working Paper: Explaining movements in the labor share (1999)
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