## What Explains the Decline of the U.S. Labor Share of Income? An Analysis of State and Industry Level Data

_IMF Working Papers, July 24, 2017_

## Source details

**Canonical URL:** [What Explains the Decline of the U.S. Labor Share of Income? An Analysis of State and Industry Level Data](https://www.imf.org/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086)

## Other formats

- [Markdown version](/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086/index.md)
- [Structured JSON version](/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086/index.json)
- [Bundle manifest](/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086/bundle-manifest.json)

## Bibliographic details
- Authors: Yasser Abdih, Stephan Danninger
- Published: July 24, 2017
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484311004.001

---

### Key findings
- 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:
  - Changes in labor institutions (including steep declines in unionization in affected industries).
  - Technological change, especially automation linked to routine tasks.
  - Different forms of trade integration (including high competition from imports and high intensity of foreign input usage).
- Industries that experienced the largest average falls in the labor share had:
  - A high initial intensity of “routinizable” occupations.
  - Steep declines in unionization.
  - A high level of competition from imports.
  - A high intensity of foreign input usage.

### Quantitative conclusions
- 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.

### Data and scope
- The analysis exploits:
  - A new data set on the task characteristics of occupations.
  - U.S. input-output tables.
  - The Current Population Survey.
- The study disaggregates results across both state and industry to document variation in the labor share decline.

### Policy-relevant implications
- Policies addressing the decline in the labor share should consider:
  - The role of automation of routine tasks and the need for labor-market responses (training, reallocation support).
  - The interaction of trade integration with domestic labor institutions (including unionization trends).
  - Industry- and state-specific conditions, given large heterogeneity in the extent of the labor share decline.

*IMF Working Paper by Yasser Abdih and Stephan Danninger, July 24, 2017.*

---

## Content in this bundle

- **What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017**
  - [What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017 (Markdown version)](/-/media/files/publications/wp/2017/wp17167.pdf.md){rel="alternate" type="text/markdown"}
  - [What Explains the Decline of the U.S. Labor Share of Income?, WP/17/167, July 2017 (PDF)](/-/media/files/publications/wp/2017/wp17167.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2017/07/24/what-explains-the-decline-of-the-u-s-45086_