Effects of Globalization on Labor's Share in National Income

IMF Research Bulletin, September 2007

“…Two new studies reexamine the effect of globalization on labor's share in a broader set of advanced economies. After analyzing the experience of 18 advanced economies over the period 1960-2000, Guscina (2006 concludes that in the era of globalization, both technological progress and international trade (measured as the share of imports and exports in GDP) have squeezed labor compensation and its share in national income-an outcome that is consistent with the Heckscher-Ohlin predictions.…”

The distributive impacts of the Belt and Road Initiative

“…Pooling data from both developing and developed countries, trade openness is found to be negatively correlated with the labor share and this result is robust across different specifications (Guerriero & Sen, 2012; Harrison, 2005; Jayadev, 2007). Using data from OECD countries, Guscina (2006) and Jaumotte and Tytell (2007) concluded that trade with developing countries adversely affected the labor share in OECD countries. This finding is disputed by Stockhammer (2009) who questioned their identification strategies.…”

In search of a new economic model determined by logistic growth

“…Therefore we conclude that not only the Cobb-Douglas production function (1.1), but also the wage share s L = I given by (6.12) is a consequence of the exponential growth in K and L as a differential invariant obtained within the framework of the growth model (G, R 2 + ), where the action of the Lie group G is given by (2.2), that is exponential growth ⇒ the wage share function (6.12). Now let us redo the above calculations for the growth model (G 1 , R 2 + ), where the action of G 1 is given by (3.1) and thus give a solution to the seemingly unresolved problem of the determination of why Bowley's law [9,10] does not hold true anymore in post-1960s data [8,24,37,44].…”