What Determines the Capital Share Over the Long Run of History?

Bengtsson, Erik; Rubolino, Enrico; Waldenström, Daniel

doi:10.2139/ssrn.3590898

Cited by 8 publications

(7 citation statements)

References 52 publications

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“…3) is the measure here which shows the most immediate effect of democratization (cf. Bengtsson, Rubolino and Waldenström, 2020). The capital share fell from a peak of around 50% in 1916 17, the years of war time profiteering, to around 35% in the 1920s and eventually to 25 30% in the 1950s and 1960s.…”

Section: Trends In Taxation Social Spending and Inequalitymentioning

confidence: 97%

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Does Democratization Cause Redistribution? Evidence from Sweden and Brazil

Bengtsson

Morgan

2022

Palgrave Studies in Economic History

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This paper explores the relationship between democratization and economic redistribution using case study analysis applied to Sweden and Brazil. We find that democratization is intimately connected to redistribution through the welfare state, but as an event in itself is neither a necessary nor a sufficient cause of redistributive reforms. Democratization is not strictly necessary, because in anticipation of social unrest and social protest movements, political regimes, including undemocratic regimes, imposed welfare reforms to co-opt these movements. This can be seen for example in Sweden in the early twentieth century or in Brazil in the 1930s, 1940s and the 1970s. Democratization is also not sufficient for redistribution, since people also needed to act politically within the new democratic regimes to make use of the formal constitutional changes. The ability to act politically depends on organizational opportunities, which are facilitated when there are few barriers to influence policymaking (e.g., strikes, unionization, working class political parties, unified labour markets, reformist intellectuals and a competent and cooperative bureaucracy). The lack of these factors is enough to introduce substantial temporal lag in the adoption of reforms. More generally, given that democratization itself is a form of redistribution, the same social forces i.e. social movements representing disenfranchised lower-income groups commonly push for both, confounding the effect of democratization on redistribution. The historical case studies in this paper help us understand how.

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Section: Trends In Taxation Social Spending and Inequalitymentioning

confidence: 97%

“…This democratic push redistributed income immediately by moving income from capital owners to wage earners (cf. Bengtsson and Molinder, 2017;Bengtsson, Rubolino and Waldenström, 2020). This happened because trade unions and worker militancy meant that workers could demand a larger share of the surplus.…”

Section: Democratization and Redistributive Reformsmentioning

confidence: 99%

Does Democratization Cause Redistribution? Evidence from Sweden and Brazil

Bengtsson

Morgan

2022

Palgrave Studies in Economic History

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“…3) is the measure here which shows the most immediate effect of democratization (cf. Bengtsson et al, 2020). The capital share fell from a peak of around 50% in 1916-17, the years of war-time profiteering, to around 35% in the 1920s and eventually to 25-30% in the 1950s and 1960s.…”

Section: Trends In Taxation Social Spending and Inequalitymentioning

confidence: 98%

“…This democratic push redistributed income immediately by moving income from capital owners to wage earners (cf. Bengtsson & Molinder, 2017;Bengtsson et al, 2020). This happened because trade unions and worker militancy meant that workers could demand a larger share of the surplus.…”

Section: Democratization and Redistributive Reformsmentioning

confidence: 99%

Scandinavia and South America—A Tale of Two Capitalisms

2022

Palgrave Studies in Economic History

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“…Marta Guerreiro (Guerriero 2019) conducts a largely crosssectional analysis of democracy and the labor share of income, focusing on two 5-year time periods (2005-2009 and 2010-2014). While not analyzing regime type specifically, Waldenström, Bengtsson, and Rubolino (2020) study related phenomena, limiting the focus to 20 European countries but over a much longer time period (the late 19th century to the present). 1 I expand on (Guerriero 2019) by adding a time-series component and to (Waldenström et al 2020) by expanding the data's crosssectional coverage.…”

Section: Introductionmentioning

confidence: 99%

Democracy, Labor’s Share of Income, and Labor Supply: A Time-Series Cross-Sectional Analysis

Brown

2022

Political Research Quarterly

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This paper examines democracy’s impact on the labor share of income: the share of Gross Domestic Product (GDP) dedicated to wages, salaries, and benefits. I hypothesize democratic regimes afford labor the opportunity to increase its share of national income. While previous empirical work finds cross-sectional evidence for the hypothesis, this paper employs a time-series cross-sectional analysis using data for 119 countries between 1950 and 2017, indicating the labor share of income is higher in democratic countries. The estimates are robust to different specifications of the statistical model. This paper also examines a potential causal mechanism that links democracy to a higher labor share through the supply of labor (the average number of hours worked in the economy). The relationship between democracy and the supply of labor lends additional evidence to my hypothesis. In a world characterized by diverging democracy, the results imply the path countries choose between democracy and dictatorship matters.

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What Determines the Capital Share Over the Long Run of History?

Cited by 8 publications

References 52 publications

Does Democratization Cause Redistribution? Evidence from Sweden and Brazil

Does Democratization Cause Redistribution? Evidence from Sweden and Brazil

Scandinavia and South America—A Tale of Two Capitalisms

Democracy, Labor’s Share of Income, and Labor Supply: A Time-Series Cross-Sectional Analysis

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