Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/222667
Authors: 
O'Mahony, Mary
Vecchi, Michela
Venturini, Francesco
Year of Publication: 
2018
Series/Report no.: 
ADBI Working Paper Series No. 900
Abstract: 
We investigate the causes of the decline in the labor share, exploring the effect of technology vis-à-vis the role of market regulations, namely employment protection legislation, product market regulation, and intellectual property rights (IPR) protection. Our results show that, in the long run, productivity upgrades and information and communication technology capital diffusion are major sources of the decline in the labor share. IPR protection is the only dimension of the institutional setting that affects (positively) the share of industry income accruing to labor. Our results also show that hysteresis characterizes the dynamics of the labor share in all countries. This further corroborates the idea that institutional differences are not the main source of variation in labor share movements, as the negative trend is common to countries with different regulatory settings.
Subjects: 
labor share
technological change
ICT capital
market regulations
hysteresis
JEL: 
C23
E24
E25
O33
Creative Commons License: 
https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
Document Type: 
Working Paper

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