Markups, Labor Market Inequality and the Nature of Work

Greg Kaplan and Piotr Żoch

No 26800, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We demonstrate the importance of distinguishing between the traditional use of labor for production, versus alternative uses of labor for overhead, marketing and other expansionary activities, for studying the distribution of both factor income and labor income. We use our framework to assess the impact of changes in markups on the overall labor share and on labor income inequality across occupations. We identify the production and expansionary content of different occupations from the co-movement of occupational income shares with markup-induced changes in the labor share. We find that around one-fifth of US labor income compensates expansionary activities, and that occupations with larger expansionary content have experienced the fastest wage and employment growth since 1980. Our framework can rationalize a counter-cyclical labor share in the presence of sticky prices and can be used to study the distributional effects of demand shocks, monetary policy and secular changes in competition.

JEL-codes: D2 D3 D4 E3 E5 J2 L1 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-hme, nep-lma and nep-mac
Note: EFG IO ME
References: Add references at CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
http://www.nber.org/papers/w26800.pdf (application/pdf)

Related works:
Working Paper: Markups, labor market inequality and the nature of work (2022)
Working Paper: Markups, Labor Market Inequality and the Nature of Work (2020)
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:nbr:nberwo:26800

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w26800

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().