Does employees’ compensation vary with corporate profit?

Knut Lehre Seip and Robert McNown

Journal of Policy Modeling, 2015, vol. 37, issue 2, 281-290

Abstract: We find that from about 1965 to 1983 US employees’ compensation, EC, relative to corporate profit, CP, increases in the long run, and from 1984 to 2013 the compensation decreases relative to profit to about half its 1983 value. The first period includes “US peacetime inflation”, 1970–1978 and the last period includes “The Great Moderation”, 1985–1997. With the exception of a short period 1998–2003, the dominant pattern is that corporate profit and employees’ compensation increase and decrease in concert, but compensation lags profit with about 10 quarters. From 1965 to present, cycle times for the EC–CP pair generally decreases from about 60 quarters to about 40 quarters.

Keywords: Functional distribution of income; Compensation; Profits; Business cycles (search for similar items in EconPapers)
JEL-codes: D33 E32 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:37:y:2015:i:2:p:281-290

DOI: 10.1016/j.jpolmod.2015.01.012

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