Working Paper: NBER ID: w31854
Authors: Loukas Karabarbounis
Abstract: As of 2022, the share of U.S. income accruing to labor is at its lowest level since the Great Depression. Updating previous studies with more recent observations, I document the continuing decline of the labor share for the United States, other countries, and various industries. I discuss how changes in technology and product, labor, and capital markets affect the trend of the labor share. I also examine its relationship with other macroeconomic trends, such as rising markups, higher concentration of economic activity, and globalization. I conclude by offering some perspectives on the economic and policy implications of the labor share decline.
Keywords: No keywords provided
JEL Codes: D2; D33; E0; J2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological Changes (O33) | Decline in Labor Share (E25) |
| Market Dynamics (D49) | Decline in Labor Share (E25) |
| Globalization (F60) | Decline in Labor Share (E25) |