Working Paper: NBER ID: w26136
Authors: Gilbert Cette; Lorraine Koehl; Thomas Philippon
Abstract: We study the joint impact of three measurement issues in the empirical literature on the labor share: (i) start and end periods for the empirical analysis; (ii) accounting for self-employment; and (iii) accounting for residential real estate income. When we correct for these three potential biases, we do not find a general decline in the labor share in our sample of advanced economies. In that respect the behavior of the US labor share after 2000 presents a puzzle.
Keywords: No keywords provided
JEL Codes: E01; E02; E2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| correcting for starting periods, self-employment, and real estate income (J39) | conclusion that there is no general decline in labor share (E25) |
| initial labor share values in the late 1970s were unusually high (J49) | spurious appearance of decline when analyzing later periods (E32) |
| accounting for self-employment (M41) | clearer picture of labor share dynamics (E25) |
| excluding residential real estate income (R33) | clearer picture of labor share dynamics (E25) |
| US labor share shows notable decline post-2000 (F66) | contrast with trends in Europe where labor shares remained stable (D33) |