The fall of the labour income share: the role of technological change and imperfect labour markets

Francesco Carbonero, Christian Offermanns and Enzo Weber

No 201728, IAB-Discussion Paper from Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]

Abstract: "The non-constancy of factor shares is drawing the attention of many researchers. We document an average drop of the labour share of 8 percentage points for eight European countries and the US between 1980 and 2007. We investigate theoretically and empirically two mechanisms: the substitution between Information Communication Technology (ICT) and labour and the presence of hiring costs. We find that the ICT-labour replacement is a promising channel to explain the decline of the labour share, though labour market frictions takes part of its explanatory power over. In particular, hiring costs have a bigger role in Europe than in the US. Finally, by modelling the elasticity of substitution between ICT and labour as a function of institutional and structural variables, we find that it correlates with the share of routine occupations (positively) and with the share of high-skill workers (negatively)." (Author's abstract, IAB-Doku) ((en))

Keywords: Bundesrepublik Deutschland; Dänemark; Frankreich; Irland; Italien; Niederlande; Österreich; Spanien; USA; Auswirkungen; Auswirkungen; Beschäftigungseffekte; Einkommensverteilung; internationaler Vergleich; Kosten; Lohnquote; Personalbeschaffung; Personaleinstellung; qualifikationsspezifische Faktoren; Substitutionseffekte; Substitutionselastizität; technischer Wandel; 1980-2007 (search for similar items in EconPapers)
JEL-codes: E02 E25 J30 J64 O33 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:iab:iabdpa:201728

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