{
  "title": "What Explains the Decline of the U.S. Labor Share of Income? An Analysis of State and Industry Level Data",
  "publication": "IMF Working Papers, July 24, 2017",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086",
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  "summary": "The U.S. labor share of income has been on a secular downward trajectory since the beginning of the new millennium. Using data that are disaggregated across both state and industry, we show the decline in the labor share is broad-based but the extent of the fall varies greatly.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- The U.S. labor share of income has been on a secular downward trajectory since the beginning of the new millennium.\n- The decline in the labor share is broad-based across states and industries, but the extent of the fall varies greatly.\n- Drivers identified:\n  - Changes in labor institutions (including steep declines in unionization in affected industries).\n  - Technological change, especially automation linked to routine tasks.\n  - Different forms of trade integration (including high competition from imports and high intensity of foreign input usage).\n- Industries that experienced the largest average falls in the labor share had:\n  - A high initial intensity of “routinizable” occupations.\n  - Steep declines in unionization.\n  - A high level of competition from imports.\n  - A high intensity of foreign input usage."
    },
    {
      "heading": "Quantitative conclusions",
      "content": "- Quantitatively, the bulk of the decline is attributed to changes in technology linked to the automation of routine tasks, followed by trade globalization.\n- The paper uses data disaggregated across both state and industry, a new data set on the task characteristics of occupations, the U.S. input-output tables, and the Current Population Survey."
    },
    {
      "heading": "Data and scope",
      "content": "- The analysis exploits:\n  - A new data set on the task characteristics of occupations.\n  - U.S. input-output tables.\n  - The Current Population Survey.\n- The study disaggregates results across both state and industry to document variation in the labor share decline."
    },
    {
      "heading": "Policy-relevant implications",
      "content": "- Policies addressing the decline in the labor share should consider:\n  - The role of automation of routine tasks and the need for labor-market responses (training, reallocation support).\n  - The interaction of trade integration with domestic labor institutions (including unionization trends).\n  - Industry- and state-specific conditions, given large heterogeneity in the extent of the labor share decline.\n\nIMF Working Paper by Yasser Abdih and Stephan Danninger, July 24, 2017.\n\n---\n\n Content in this bundle\n\n- What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017\n  - What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086"
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    "Authors: Yasser Abdih, Stephan Danninger",
    "Published: July 24, 2017",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781484311004.001",
    "The U.S. labor share of income has been on a secular downward trajectory since the beginning of the new millennium.",
    "The decline in the labor share is broad-based across states and industries, but the extent of the fall varies greatly.",
    "Drivers identified:",
    "Industries that experienced the largest average falls in the labor share had:",
    "Quantitatively, the bulk of the decline is attributed to changes in technology linked to the automation of routine tasks, followed by trade globalization.",
    "The paper uses data disaggregated across both state and industry, a new data set on the task characteristics of occupations, the U.S. input-output tables, and the Current Population Survey.",
    "The analysis exploits:",
    "The study disaggregates results across both state and industry to document variation in the labor share decline.",
    "Policies addressing the decline in the labor share should consider:",
    "**What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017**"
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