EconPapers    
Economics at your fingertips  
 

Labor shares in the old and new EU member states - Sectoral effects and the role of relative prices

István Kónya (), Judit Krekó and Gábor Oblath

Economic Modelling, 2020, vol. 90, issue C, 254-272

Abstract: The paper studies the labor share among countries of the European Union, with a particular attention to the newer member states of Central and Eastern Europe (CEEU). We find that CEEU countries typically have lower labor shares than older EU member states, both in the aggregate and at the sectoral level. Structural change, while quite pronounced among the CEEU economies, plays only a minor role in the evolution of the labor share. The exception is agriculture, which for some countries has a sizable impact on the level and dynamics of the labor share - partly because of important measurement problems. We also find that a significant part of the difference in conventionally measured labor shares between the more developed EU countries and less developed CEEU countries can be attributed to differences in relative prices. This is consistent with a productivity-based explanation: we show that a simple, calibrated two-sector model with sectoral productivity differentials can explain 36–71% of cross-country variations in the non-agricultural labor share.

Keywords: Labor share; Labor productivity; Relative prices; European Union (search for similar items in EconPapers)
JEL-codes: E24 J30 O11 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999319316967
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:90:y:2020:i:c:p:254-272

DOI: 10.1016/j.econmod.2020.05.010

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2021-01-23
Handle: RePEc:eee:ecmode:v:90:y:2020:i:c:p:254-272