The Structural Determinants of the Labor Share in Europe
42 Pages Posted: 15 Apr 2019
Date Written: March 2019
Abstract
The labor share in Europe has been on a downward trend. This paper finds that the decline is concentrated in manufacture and among low- to mid-skilled workers. The shifting nature of employment away from full-time jobs and a rollback of employment protection, unemployment benefits and unemployment benefits have been the main contributors. Technology and globalization hurt sectors where jobs are routinizable but helped others that require specialized skills. High-skilled professionals gained labor share driven by productivity aided by flexible work environments, while low- and mid-skilled workers lost labor share owing to globalization and the erosion of labor market safety nets.
Keywords: National income, Labor market reforms, National income accounts, Economic integration, Labor market policy, labor share, technology, employment policies, globalization, employment protection, temporary contract, NMS, structural factor, investment good
JEL Classification: E25, F66, J31, O33, E01, E2, J3, P24, F16
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