Why Is Labor Receiving a Smaller Share of Global Income? Theory and Empirical Evidence
Electronic Access:
Free Download. Use the free Adobe Acrobat Reader to view this PDF file
Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Summary:
This paper documents the downward trend in the labor share of global income since the early 1990s, as well as its heterogeneous evolution across countries, industries and worker skill groups, using a newly assembled dataset, and analyzes the drivers behind it. Technological progress, along with varying exposure to routine occupations, explains about half the overall decline in advanced economies, with a larger negative impact on middle-skilled workers. In emerging markets, the labor share evolution is explained predominantly by global integration, particularly the expansion of global value chains that contributed to raising the overall capital intensity in production.
Series:
Working Paper No. 2017/169
Subject:
Emerging and frontier financial markets Financial markets Global value chains Globalization Labor Labor share
English
Publication Date:
July 24, 2017
ISBN/ISSN:
9781484311042/1018-5941
Stock No:
WPIEA2017169
Pages:
70
Please address any questions about this title to publications@imf.org