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The Evolution of the Labor Share across Developed Countries
Report

The Evolution of the Labor Share across Developed Countries


автоматическое преобразование текста в аудио
автоматическое преобразование текста в аудио

Editorial Rating

7

Qualities

  • Analytical
  • Overview
  • For Experts

Recommendation

Debates about the impacts of income inequality and globalization often turn to the diminished role of labor in an economy. Though labor share – “the percentage of economic output that accrues to workers as labor compensation” – has declined in numerous developed countries, the reasons for its drop vary among the different economies, according to this scholarly report from researchers Roberto Pinheiro and Meifeng Yang. They explore various explanations for the shift, but they home in on the impacts of changes in economies and the substitution of technology for human capital. Economists, labor analysts and policy experts will find this succinct but technical analysis a worthwhile read.

Take-Aways

  • In the developed nations, the share of economic production that goes to workers in the form of compensation has been decreasing.
  • Economists analyze changes and trends in the labor share metric because it defines the degree to which workers experience real wage growth that rewards them for increases in their productivity.
  • One model posits that labor share deviates over time due to “structural changes” in a country’s output.

About the Authors

Robert Pinheiro and Meifeng Yang are researchers at the Federal Reserve Bank of Cleveland. 


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