The Labor Share Squeeze in Latin America: A Dynamic Heterogeneous Approach

Joy Ryan (), Cesar Rodriguez and Inder Ruprah ()
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Joy Ryan: Department of Economics, Stony Brook University, Stony Brook, USA

Global Economy Journal, 2018, vol. 18, issue 2, 13

Abstract: This paper analyzes the long-run relationship between labor share and its determinants for 20 Latin American countries from 1980 to 2014. Using the pooled mean group estimator, we find evidence that technological change, the globalization process, and financial integration, have contributed to the decline of labor share in Latin America. We also find evidence of the importance of institutional factors and public spending for the labor share. Finally, we discuss the role of the informal sector on the dynamics of the decline. Our key findings are robust to various specifications and methodologies.

Keywords: labor share; capital-output ratio; Latin America; pooled mean group estimation (search for similar items in EconPapers)
JEL-codes: E24 E25 F55 H80 (search for similar items in EconPapers)
Date: 2018
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DOI: 10.1515/gej-2017-0083

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