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

62 Pages Posted: 2 Aug 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

Multiple version iconThere are 2 versions of this paper

Date Written: July 19, 2019

Abstract

We show that cross-country comparisons of corporate labor shares are affected by differences in the delineation of corporate sectors. While the US excludes all self-employed and most dwellings from the corporate sector, other countries include large amounts of both — biasing labor shares downwards. We propose two methods to control for these differences and obtain ‘harmonized’ non-housing labor share series. Contrary to common wisdom, the harmonized series remain stable across all major economies except the US, where the labor share still declines, primarily due to manufacturing. These new facts cast doubts on most technological explanations for the labor share decline.

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 (July 19, 2019). Bank of England Working Paper No. 811, July 2019, NYU Stern School of Business, Available at SSRN: https://ssrn.com/abstract=3422923 or http://dx.doi.org/10.2139/ssrn.3422923

German Gutierrez Gallardo

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

NY
United States

Sophie Piton (Contact Author)

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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