## The Structural Determinants of the Labor Share in Europe

_IMF Working Papers, March 22, 2019_

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## Bibliographic details
- Authors: Dilyana Dimova
- Published: March 22, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781498302920.001

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### Summary findings
- The labor share in Europe has been on a downward trend.
- The decline is concentrated in manufacture and among low- to mid-skilled workers.
- The shifting nature of employment away from full-time jobs and a rollback of employment protection, unemployment benefits and unemployment benefits have been the main contributors.
- Technology and globalization hurt sectors where jobs are routinizable but helped others that require specialized skills.
- High-skilled professionals gained labor share driven by productivity aided by flexible work environments.
- Low- and mid-skilled workers lost labor share owing to globalization and the erosion of labor market safety nets.

### Drivers and mechanisms
- Employment composition shifts: movement away from full-time jobs contributed to lower labor share.
- Policy rollback: reductions in employment protection and unemployment benefits (noted twice in source text) are identified as major contributors.
- Technology: automation and routinization reduced labor share in routine-intensive sectors, while productivity gains in specialized-skill sectors increased labor share for high-skilled workers.
- Globalization: import penetration and international competition reduced labor share for workers in tradable, routinizable occupations, particularly low- and mid-skilled workers.

### Distributional patterns
- Sectoral concentration: manufacturing shows the most pronounced labor share decline.
- Skill polarization: divergence between high-skilled professionals (gains) and low- to mid-skilled workers (losses).
- Interaction effects: flexible work environments amplified productivity gains for high-skilled workers; erosion of labor market safety nets amplified losses for lower-skilled workers.

### Key statistics and publication identifiers
- Pages: 41
- Volume: 2019
- Issue: 067
- Series: Working Paper No. 2019/067
- DOI: https://doi.org/10.5089/9781498302920.001
- ISBN: 9781498302920
- ISSN: 1018-5941
- Author: Dilyana Dimova
- Publication date: March 22, 2019

*Source: "The Structural Determinants of the Labor Share in Europe", IMF Working Papers, Dilyana Dimova, March 22, 2019.*

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_Source: https://www.imf.org/en/publications/wp/issues/2019/03/22/the-structural-determinants-of-the-labor-share-in-europe-46668_