Globalisation, Concentration and Footloose Firms: In Search of the Main Cause of the Declining Labour Share
37 Pages Posted: 12 Aug 2011
Date Written: March 3, 2011
Abstract
Over the last two decades the share of national income which accrues to labor has followed a marked downward trend across a host of industrialized countries. This paper reassesses the relative importance of several potential causes of this phenomenon. Overall, the findings suggest that lower trade costs and factors often associated with economic integration such as international low-wage competition and industry concentration have contributed to the decline in the labor share. However, their effects have been limited when compared to the effects of skill-based technological change and cyclical price changes of intermediary goods.
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