EconPapers    
Economics at your fingertips  
 

The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration

Gene Grossman (), Elhanan Helpman, Ezra Oberfield () and Thomas Sampson

No 6714, CESifo Working Paper Series from CESifo

Abstract: We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation à la Ben Porath (1967) and capital-skill complementarity à la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early postwar period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the U.S. labor share.

Keywords: neoclassical growth; balanced growth; technological progress; capital-skill complementarity; labor share; capital share (search for similar items in EconPapers)
JEL-codes: O40 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-dge and nep-gro
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (28) Track citations by RSS feed

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp6714.pdf (application/pdf)

Related works:
Working Paper: The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration (2017) Downloads
Working Paper: The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration (2017) Downloads
Working Paper: The productivity slowdown and the declining labor share: a neoclassical exploration (2017) Downloads
Working Paper: The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration (2017) Downloads
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:ces:ceswps:_6714

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2021-06-25
Handle: RePEc:ces:ceswps:_6714