Distribution‐Utilization Interactions: A Race‐to‐the‐Bottom Among Oecd Countries

Rada, Codrina; Kiefer, David M.

doi:10.1111/meca.12081

Cited by 20 publications

(10 citation statements)

References 25 publications

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“…These findings appear to hold for other countries. Hogrefe and Kappler (2013) and Rada and Kiefer (2016) show similar results on the basis of econometric analysis for OECD countries. Unlike Elsby et al (2013), the latter authors also find that union density remains a fairly robust correlate of the labor share even when including an index of globalization.…”

Section: Discussion: Baumol Lewis and Stagnationsupporting

confidence: 57%

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The Decline of the US Labor Share Across Sectors

Mendieta‐Muñoz

Rada

Arnim

2020

Review of Income and Wealth

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We provide novel insights on the functional distribution of income in the postwar US economy, based on a Log Mean Divisia Index decomposition of the labor share by 14 sectors. We identify contributions from four components: real compensation, labor productivity, employment shares, and relative prices. The results are presented for the entire period as well as golden age (1948–1979) and neoliberal era (1979–2017), painting a detailed picture of structural changes. We find that (1) real compensation and labor productivity dominate; (2) manufacturing plays an important role in the recent decline of the labor share; (3) employment shifts toward service sectors with higher labor shares have buffered the decline; and (4) relative prices of services are increasing. We discuss these results in the context of Baumol’s and Lewis’s seminal contributions. Both theories build on the notion of coexistence of progressive and stagnant activities, which is documented in our sectoral decomposition.

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Section: Discussion: Baumol Lewis and Stagnationsupporting

confidence: 57%

Section: Baumol and Lewis: Structural Change Stagnation And The Labor Share Of Incomementioning

confidence: 58%

The Decline of the US Labor Share Across Sectors

Mendieta‐Muñoz

Rada

Arnim

2020

Review of Income and Wealth

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Section: Discussion: Baumol Lewis and Stagnationsupporting

confidence: 57%

The Decline of the U.S. Labor Share Across Sectors

2019

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This paper provides novel insights on the changing functional distribution of income in the postwar US economy. We present a Divisia index decomposition of the US labor share (1948-2017) by fourteen sectors. The decomposition method furnishes exact contributions from four components towards aggregate changes of the labor share: sectoral real compensation, sectoral labor productivity, the structure of the economy as measured by employment shares, and the structure of markets as measured by relative prices. Results are presented for the entire period as well as the "golden age" (1948-1979) and a "neoliberal era" (1979-2017), painting a rich and detailed picture of structural changes in the US economy. The manufacturing sector plays a dominant role: despite its continuously falling employment share, growth of real compensation matches that of labor productivity in the early period but falls far behind during the neoliberal

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“…On the other hand, Hein and Vogel (2009) and Stockhammer and Onaran (2012) have found wage-led results. Nikiforos and Foley (2012) have shown that non-linearities are of great importance, while Rada and Kiefer (2015) find empirically that, in accordance with numerical results by von Arnim et al (2014), global demand looks wage-led even though individual countries appear to be profit-led. From a theoretical standpoint, whether demand and growth are wage-led or profit-led (or neither) in the short run depends on the shape of the investment function.…”

Section: Related Literaturesupporting

confidence: 61%

Government spending composition, aggregate demand, growth, and distribution

Zamparelli¹,

Tavani

2017

Review of Keynesian Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe study a demand-driven growth and distribution model with a public sector, both without and with government debt. Government spending is used to finance the accumulation of public capital and to pay wages to public employees. The interaction between public capital and induced technical change makes long-run growth: (i) hump-shaped in the composition of government spending, (ii) wage-led, and (iii) government spending-led. Provided that the interest rate on government bonds is kept sufficiently below the growth rate, the size of government debt is irrelevant for long-run growth.Keywords: Keynesian growth, Government spending composition, Factor shares, Fiscal policys. JEL Classification System: E12, E25, E62, H50. We study a demand-driven growth and distribution model with a public sector, both without and with government debt. Government spending is used to finance the accumulation of public capital and to pay wages to public employees. The interaction between public capital and induced technical change makes long-run growth: (i) hump-shaped in the composition of government spending, (ii) wage-led, and (iii) government spending-led. Provided that the interest rate on government bonds is kept sufficiently below the growth rate, the size of government debt is irrelevant for long-run growth.

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Distribution‐Utilization Interactions: A Race‐to‐the‐Bottom Among Oecd Countries

Cited by 20 publications

References 25 publications

The Decline of the US Labor Share Across Sectors

The Decline of the US Labor Share Across Sectors

The Decline of the U.S. Labor Share Across Sectors

Government spending composition, aggregate demand, growth, and distribution

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