Capital’s grabbing hand? A cross-industry analysis of the decline of the labor share in OECD countries

Abstract

We examine the determinants of the within-industry decline of the labor share, using industry-level annual data for 25 OECD countries, 20 business-sector industries and covering up to 28 years. We find that total factor productivity growth-which captures (albeit imprecisely) capital-augmenting or labor-replacing technical change-and capital deepening jointly account for as much as 80 % of the within-industry contraction of the labor share. We also find that another factor explaining the aggregate decline of the labor share is the increased international competition, with higher import penetration causing a contraction of the share of labour-intensive industries in total value added. However, the fraction of the drop of the labor share explained by international competition remains limited.

Equality‐led Development and the Demand‐ and Supply‐side Effects

“…These findings contrast with several papers in the mainstream (neoclassical/New Keynesian) tradition which emphasize the role of technological change (e.g. Bassanini and Manfredi, 2014;Bentolila and Saint-Paul, 2003;IMF, 2017; 2. Membership of the Group of Twenty (G20) comprises 19 individual countries plus the European Union (EU).…”

Verteilungseffekte von Finanzialisierung

“…Weitere Evidenz finden Kristal (2010) mit Daten von 16 OECD Ländern für FDI und Onaran (2012) für FDI und Auslandsverlagerung für Österreich. Bassanini und Manfredi (2014) bestätigen einen negativen Effekt von Offshoring auf die Lohnquote, der allerdings über eine Veränderung der sektoralen Komposition wirkt. 11 Neoklassische Ökonomen erklären die Zunahme funktionaler Einkommensungleichheit durch qualifikationsverzerrten technologischen Fortschritt (skill-biased technical change) im Kontext von Globalisierung.…”

“…5), den Internationalen Währungsfonds (IMF 2007, Kap. 4) und Bassanini und Manfredi (2014) überprüft, aber keine der Studien berücksichtigt Finanzialisierungsvariablen.…”

The production and reproduction of inequality in the UK in times of austerity

“…In the UK this has entailed both private strategies of offshoring and the replacement of labour with technology as well as state-led features such as politically induced unemployment, anti-trade union legislation, privatisation and popular discipline through financialisation (Nunn, 2014). The OECD now also broadly accepts many of the component parts of this explanation (including privatisation, reductions in Employment Protection Legislation, off-shoring, trade and financial liberalisation), even if it still presents these in depoliticised terms (see Bassanini and Manfredi, 2012;OECD, 2011OECD, , 2012). …”