The decline of the wage share in value-added: What have we learned from North African firms?

Youssef Bouazizi, Ouail Oulmakki, Luc Savard and Jérôme Verny

Structural Change and Economic Dynamics, 2025, vol. 72, issue C, 150-162

Abstract: This study, based on a World Bank survey of 5,351 observations in Morocco, Egypt, and Tunisia, offers a detailed analysis of the factors leading to the reduction in the wage share of value added in North African companies. The findings suggest that increased capital and technological advancements, especially in patent adoption, are principal contributors to this decrease. Moreover, the intensification of both local and foreign competition, along with trade liberalization facilitated by offshoring, negatively affects the wage share. However, the influence of privatization and foreign direct investment on this trend is minimal. The research also emphasizes the need to include sectoral variability of large firms in the analysis to fully understand the underlying dynamics.

Keywords: Globalization; Income inequality; Microeconomic analysis; Technical progress; Wage share (search for similar items in EconPapers)
JEL-codes: D33 F16 F61 J30 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:72:y:2025:i:c:p:150-162

DOI: 10.1016/j.strueco.2024.11.007

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