Labour Share Developments in OECD Countries Over the Past Two Decades

Mathilde Pak, Pierre-Alain Pionnier and Cyrille Schwellnus

Economie et Statistique / Economics and Statistics, 2019, issue 510-511-512, 17-34

Abstract: [eng] Over the past two decades, real wage growth in many OECD countries has decou¬pled from labour productivity growth, as labour income shares have declined. This paper analyses the drivers of labour share developments using a combination of industry- and firm-level data. Technological change in the investment goods-producing sector and greater global value chain participation have compressed labour shares, but the effect of technological change has been significantly less pronounced for high-skilled workers. Countries with falling labour shares have witnessed both a decline at the technological frontier and a reallocation of market shares toward “superstar” firms with low labour shares. The decline at the technological frontier mainly reflects the entry of firms with low labour shares into the frontier rather than a decline of labour shares in incumbent frontier firms, suggesting that thus far this process is mainly explained by technological dynamism rather than anti-competitive forces.

JEL-codes: D33 F66 J24 J38 J58 L11 O33 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:nse:ecosta:ecostat_2019_510t_4

DOI: 10.24187/ecostat.2019.510t.1992

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