Labour Share Developments in OECD Countries Over the Past Two Decades

Firm heterogeneity and the aggregate labour share

“…Harrison (2002); Lee and Jayadev (2005); Guscina (2006); Daudey and García-Peñalosa (2007); Jayadev (2007); IMF (2007) and Elsby et al (2013), among others, focus on globalisation and its implications in terms of the balance of power between capital and labour. Deregulation of product and labour markets, including privatisation policies, de-unionisation and the decline of employment-protection policies, is emphasised by Bassanini and Duval (2006); Annett (2006); Bental and Demougin (2010); Stiglitz (2012); Barkai (2016); Ciminelli et al (2018); Dizon and Lim (2018); Dimova (2019) and Pak and Schwellnus (2019), among others. Blanchard and Giavazzi (2003), in an influential theoretical work, take into account the general equilibrium effects of deregulation policies and show that workers lose from product market deregulation but gain as consumers, and they eventually gain even from labour market deregulation, although only in long run, due to lower unemployment.…”

Firm Heterogeneity and the Aggregate Labour Share

“…Harrison (2002); Lee and Jayadev (2005); Guscina (2006); Daudey and García-Peñalosa (2007); Jayadev (2007); IMF (2007) and Elsby et al (2013), among others, focus on globalisation and its implications in terms of the balance of power between capital and labour. Deregulation of product and labour markets, including privatisation policies, de-unionisation and the decline of employment-protection policies, is emphasised by Bassanini and Duval (2006); Annett (2006); Bental and Demougin (2010); Stiglitz (2012); Barkai (2016); Ciminelli et al (2018); Dizon and Lim (2018); Dimova (2019) and Pak and Schwellnus (2019), among others. Blanchard and Giavazzi (2003), in an influential theoretical work, take into account the general equilibrium effects of deregulation policies and show that workers lose from product market deregulation but gain as consumers, and they eventually gain even from labour market deregulation, although only in long run, due to lower unemployment.…”

Population ageing and government revenue

“…38 The negative impact on growth due to the potential distortions generated by carbon taxation is relative to a future without climate change. However, the growth impact of carbon taxation would be minor compared with the huge direct costs of unabated climate change (IMF, 2020 [105]; Office for Budget Responsibility, 2021 [81]). Moreover, the tax impact could be mitigated by growth-enhancing use of the additional revenues (e.g.…”

“…• If countries achieve their emissions targets (including via new and improved technologies, regulations and standards), revenue from future carbon taxation and already existing excise taxes on fossil fuels could vanish. 41 Consequently, maintaining or increasing revenue from environmentally-related taxes would likely require taxing new bases, such as levies on motoring (OECD/ITF, 2019 [80]; Office for Budget Responsibility, 2021 [81]).…”