Employment and accumulation of capital around the world: An econometric analysis

Abstract

In Marx’s economic theory, the level of employment is fundamentally determined by capital accumulation. Nevertheless, that determination is contradictory since, on the one hand, the employment level expands with the capital stock while, on the other hand, it tends to contract with technical change and the growing productivity of labour. This article seeks to estimate this contradictory effect employing two complementary econometric methods: first, cross-sectional regression analysis for more than 100 countries in the years 2014, 2004, 1994 and 1984; second, time-series analysis for the United States, France, Japan, Turkey and Mexico from 1964 to 2014. Our empirical results are in line with Marx’s theoretical framework: the level of employment grows with the expansion of fixed capital stock and reduces with increases in the productivity of labour.

Dynamics of Employment and Accumulation of Capital in Colombia, 1965–2019: An Econometric Analysis

“…This is the attraction effect of capital accumulation on the level of employment, already present in Marx’s general law of capitalist accumulation and in the Marxian literature (Reuten 2019; Mariña 2020; Foley, Michl, and Tavani 2019). In addition, this result is consistent with both cross-sectional and time-series evidence for other countries (Duque 2022b).…”

“…First, the level of employment holds a long-term relationship with the fixed capital stock (attraction effect) and productivity of labor (eviction effect). Those results are largely consistent with cross-sectional and time-series evidence about the contradictory effect of capital accumulation on the level of employment (Duque 2022b). Second, the econometric results also evidence positive bidirectional effects of the mass of profit over both the fixed capital stock and the labor productivity of labor.…”

“… 1 Duque (2022b) offers empirical evidence (both cross-sectional and time-series) of this contradictory effect for several countries. …”