Revisiting the Global Decline of the (Non-Housing) Labor Share

53 Pages Posted: 4 Jun 2019

See all articles by German Gutierrez Gallardo

German Gutierrez Gallardo

New York University (NYU) - Leonard N. Stern School of Business, Students

Sophie Piton

Bank of England

Date Written: May 16, 2019

Abstract

We identify two undocumented measurement challenges affecting corporate sector labor shares outside the United States: the inclusion of dwellings and the inclusion of self-employed workers in the corresponding sectoral accounts. Both issues have become more important over time, biasing corporate labor shares downward. We propose two methods to correct for these challenges and obtain 'true' non-housing labor share series. Contrary to common wisdom, the corrected series exhibit stable labor shares across all major economies, except the US, where the corrected labor share declines by 6 percentage points since 1980.

Keywords: Labor Share, Residential Real Estate, Self-Employment, National Accounts

JEL Classification: E22, E25, L85

Suggested Citation

Gutierrez Gallardo, German and Piton, Sophie, Revisiting the Global Decline of the (Non-Housing) Labor Share (May 16, 2019). Available at SSRN: https://ssrn.com/abstract=3384356 or http://dx.doi.org/10.2139/ssrn.3384356

German Gutierrez Gallardo (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business, Students ( email )

NY
United States

Sophie Piton

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

HOME PAGE: http://https://sites.google.com/site/sophiepiton/home

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