Shareholder Power and Workers’ Labor Market Outcomes

Hyunseob Kim

Chicago Fed Letter, 2025, issue 505, 6

Abstract: Public corporations account for about half of private employment in the United States.1 These large corporations have undergone radical changes in their ownership structure over the past several decades.2 Figure 1 illustrates the changes—total block institutional ownership, defined as the total share of equity owned by all institutional investors that own at least 5% of the shares for public firms, on average increased fourfold from 1980 to 2023. As a result, the block institutional shareholders, on average, held over 20% of the equity shares of U.S. public corporations by the end of the period. In parallel, figure 1 (panel B) shows that the labor share, as measured by the ratio of total compensation for employees to output, exhibited a declining trend.

Keywords: Labor; and; demographic; economics (search for similar items in EconPapers)
JEL-codes: E24 E25 G23 G32 J23 J31 (search for similar items in EconPapers)
Date: 2025
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