Concentrating on the Fall of the Labor Share

13 Pages Posted: 15 Mar 2017  

David H. Autor

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

David Dorn

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Lawrence F. Katz

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Christina Patterson

Federal Reserve Banks - Federal Reserve Bank of New York

John Van Reenen

London School of Economics - Centre for Economic Performance (CEP); Stanford Graduate School of Business; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 4 versions of this paper

Date Written: February 14, 2017

Abstract

The recent fall of labor’s share of GDP in numerous countries is well-documented, but its causes are poorly understood. We sketch a “superstar firm” model where industries are increasingly characterized by “winner take most” competition, leading a small number of highly profitable (and low labor share) firms to command growing market share. Building on Autor et al. (2017), we evaluate and confirm two core claims of the superstar firm hypothesis: the concentration of sales among firms within industries has risen across much of the private sector; and industries with larger increases in concentration exhibit a larger decline in labor’s share.

Suggested Citation

Autor, David H. and Dorn, David and Katz, Lawrence F. and Patterson, Christina and Van Reenen, John, Concentrating on the Fall of the Labor Share (February 14, 2017). CESifo Working Paper Series No. 6336. Available at SSRN: https://ssrn.com/abstract=2932777

David H. Autor

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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HOME PAGE: http://web.mit.edu/dautor/www

National Bureau of Economic Research (NBER)

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IZA Institute of Labor Economics

P.O. Box 7240
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David Dorn (Contact Author)

University of Zurich - Department of Economics ( email )

Zürich
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

IZA Institute of Labor Economics

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

CESifo (Center for Economic Studies and Ifo Institute) ( email )

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Germany

Lawrence F. Katz

National Bureau of Economic Research (NBER) ( email )

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Harvard University - Department of Economics ( email )

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HOME PAGE: http://www.economics.harvard.edu/faculty/katz/katz

Christina Patterson

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

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New York, NY 10045
United States

John Michael Van Reenen

London School of Economics - Centre for Economic Performance (CEP) ( email )

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United Kingdom
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Stanford Graduate School of Business ( email )

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Institute for Fiscal Studies (IFS) ( email )

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Centre for Economic Policy Research (CEPR)

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London, EC1V 3PZ
United Kingdom

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