Globalisation, Concentration and Footloose Firms: In Search of the Main Cause of the Declining Labour Share

37 Pages Posted: 12 Aug 2011

See all articles by John Hutchinson

John Hutchinson

European Central Bank (ECB)

Damiaan Persyn

KU Leuven; IZA Institute of Labor Economics

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.

Suggested Citation

Hutchinson, John and Persyn, Damiaan, Globalisation, Concentration and Footloose Firms: In Search of the Main Cause of the Declining Labour Share (March 3, 2011). Available at SSRN: https://ssrn.com/abstract=1908585 or http://dx.doi.org/10.2139/ssrn.1908585

John Hutchinson (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Damiaan Persyn

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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