Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/172990
Authors: 
Grossman, Gene
Helpman, Elhanan
Oberfield, Ezra
Sampson, Thomas
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6714
Abstract: 
We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation à la Ben Porath (1967) and capital-skill complementarity à la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early postwar period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the U.S. labor share.
Subjects: 
neoclassical growth
balanced growth
technological progress
capital-skill complementarity
labor share
capital share
JEL: 
O40
Document Type: 
Working Paper
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