Real wages and labor-saving technical change: evidence from a panel of manufacturing industries in mature and labor-surplus economies

Abstract

This paper uses panel cointegration and error correction models to unveil the direction of long-run causality between the real product wage and labor productivity at the industry level. I use two datasets of manufacturing industries: the EU-Klems dataset covering 11 industries in 19 developed economies, and the Unido Industrial Statistics Database covering 22 industries in 30 developed and developing economies. In both datasets, I find evidence of cointegration between the two variables, as well as evidence of two-way, long-run Granger causality. These findings are consistent with theories of directed technical change, which claim that a rise in labor costs sparks the adoption of labor-saving innovations. They are also consistent with distributive theories whereby real wages keep apace of labor productivity growth, giving rise to long-run stability in functional distribution.

Crescimento econômico e inovação: uma estimativa da fronteira de possibilidades de inovação

“…A existência e a direção de causalidade de longo prazo entre os salários reais e a produtividade do trabalho também são examinadas em Souza (2014). Novas evidências consistentes com a teoria clássica são encontradas pelo autor, que analisa um painel de dados para as indústrias de economias desenvolvidas e em desenvolvimento.…”

Quantitative Empirical Research in Marxist Political Economy: A Selective Review

“…An alternative approach to test for the existence of MBTC is explored in Marquetti () and by de Souza (). The basic idea used in these papers is the following.…”

“…Marquetti () uses this methodology with time series data on the U.S. economy for the period 1869–1999 and finds evidence in favour of MBTC. de Souza () extends the analysis to a panel data setting for manufacturing industries. Using the EU‐Klems dataset covering 11 industries in 19 developed countries, and the UNIDO dataset covering 22 industries in 30 developing countries, he finds evidence of MBTC.…”

Relación de largo plazo y análisis de causalidad y sensibilidad entre los salarios reales y la productividad laboral en el sector manufacturero a partir de cifras de los departamentos en Colombia.

“…En cualquier caso, no compartirían una tendencia estocástica común, no hay un mecanismo que mantenga unidos la productividad y los salarios en el largo plazo. Esto difiere de los hallazgos de Souza (2012), quien encontró que sí existe cointegración para diferentes grupos de países. Sin embargo, el mismo Souza (2012) advierte que este es un hecho estilizado propio de las economías maduras.…”