The Elusive Explanation for the Declining Labor Share

Literature Cited

1. Abdih Y, Danninger S. 2017. What explains the decline of the U.S. labor share of income? An analysis of state and industry level data Work. Pap., Int. Monet. Fund Washington, DC:
   [Google Scholar]
2. Acemoglu D. 2002. Technical change, inequality, and the labor market. J. Econ. Lit. 40:17–72
   [Google Scholar]
3. Acemoglu D. 2003. Labor- and capital-augmenting technical change. J. Eur. Econ. Assoc. 1:11–37
   [Google Scholar]
4. Acemoglu D, Aghion P, Violante GL. 2001. Deunionization, technical change and inequality. Carnegie-Rochester Conf. Ser. Public Policy 55:1229–64
   [Google Scholar]
5. Acemoglu D, Lelarge C, Restrepo P. 2020. Competing with robots: firm-level evidence from France. AEA Pap. Proc. 110:383–88
   [Google Scholar]
6. Acemoglu D, Restrepo P. 2018. The race between man and machine: implications of technology for growth, factor shares, and employment. Am. Econ. Rev. 108:61488–542
   [Google Scholar]
7. Acemoglu D, Restrepo P. 2019. Automation and new tasks: how technology displaces and reinstates labor. J. Econ. Perspect. 33:23–30
   [Google Scholar]
8. Acemoglu D, Restrepo P. 2020. Robots and jobs: evidence from US labor markets. J. Political Econ. 128:62188–244
   [Google Scholar]
9. Acemoglu D, Restrepo P. 2022. Demographics and automation. Rev. Econ. Stud. 89:11–44
   [Google Scholar]
10. Açkgöz T, Kaymak B. 2014. The rising skill premium and deunionization. J. Monet. Econ. 63:37–50
    [Google Scholar]
11. Aghion P, Bergeaud A, Boppart T, Klenow PJ, Li H. 2019. A theory of falling growth and rising rents NBER Work. Pap 26448
    [Google Scholar]
12. Amiti M, Heise S. 2021. US market concentration and import competition Staff Rep. 968, Fed. Reserve Bank New York New York:
    [Google Scholar]
13. Arnold D. 2020. Mergers and acquisitions, local labor market concentration, and worker outcomes Work. Pap., Princeton Univ. Princeton, NJ:
    [Google Scholar]
14. Atkeson A. 2020. Alternative facts regarding the labor share. Rev. Econ. Dyn. 37:S167–80
    [Google Scholar]
15. Autor D, Dorn D, Hanson GH. 2013. The China syndrome: local labor market effects of import competition in the United States. Am. Econ. Rev. 103:62121–68
    [Google Scholar]
16. Autor D, Dorn D, Katz LF, Patterson C, Van Reenen J. 2020. The fall of the labor share and the rise of superstar firms. Q. J. Econ. 135:2645–709
    [Google Scholar]
17. Autor D, Salomons A. 2018. Is automation labor-displacing? Productivity growth, employment, and the labor share NBER Work. Pap. 24871
    [Google Scholar]
18. Azar J, Marinescu I, Steinbaum M. 2020. Labor market concentration. J. Hum. Resour. 2020:1218–9914R1
    [Google Scholar]
19. Azar J, Marinescu I, Steinbaum M, Taska B. 2020. Concentration in US labor markets: evidence from online vacancy data. Labour Econ. 66:101886
    [Google Scholar]
20. Barkai S. 2020. Declining labor and capital shares. J. Finance 75:52421–63
    [Google Scholar]
21. Barro RJ. 2019. Double-counting of investment NBER Work. Pap 25826
    [Google Scholar]
22. Basu S. 2019. Are price-cost markups rising in the United States? A discussion of the evidence. J. Econ. Perspect. 33:33–22
    [Google Scholar]
23. Becker GS, Murphy KM, Tamura R. 1990. Human capital, fertility, and economic growth. J. Political Econ. 98:5 Part 2S12–37
    [Google Scholar]
24. Benkard CL, Yurukoglu A, Zhang AL. 2021. Concentration in product markets NBER Work. Pap. 28745
    [Google Scholar]
25. Benmelech E, Bergman NK, Kim H. 2020. Strong employers and weak employees: How does employer concentration affect wages?. J. Hum. Resour. 2020:0119–10007R1
    [Google Scholar]
26. Bentolila S, Saint-Paul G. 2003. Explaining movements in the labor share. B.E. J. Macroecon. 3:11–33
    [Google Scholar]
27. Berger DW, Herkenhoff KF, Mongey S. 2019. Labor market power NBER Work. Pap 25719
    [Google Scholar]
28. Berry S, Gaynor M, Scott Morton F 2019. Do increasing markups matter? Lessons from empirical industrial organization. J. Econ. Perspect. 33:344–68
    [Google Scholar]
29. Bhandari A, McGrattan ER. 2021. Sweat equity in U.S. private business. Q. J. Econ. 136:2727–81
    [Google Scholar]
30. Blanchard O. 1997. The medium run. Brook. Pap. Econ. Act. 28:289–158
    [Google Scholar]
31. Blanchard O, Giavazzi F. 2003. Macroeconomic effects of regulation and deregulation in goods and labor markets. Q. J. Econ. 118:3879–907
    [Google Scholar]
32. Bonfiglioli A, Crinò R, Fadinger H, Gancia G. 2020. Robot imports and firm-level outcomes Discuss. Pap. 14593, Cent. Econ. Policy Res. Washington, DC:
    [Google Scholar]
33. Bridgman B. 2018. Is labor's loss capital's gain? Gross versus net labor shares. Macroecon. Dyn. 22:82070–87
    [Google Scholar]
34. Bridgman B, Greenaway-McGrevy R. 2022. Public enterprise and the rise and fall of labor share. Econ. Inq 60:1320–50
    [Google Scholar]
35. Brown EHP, Hart PE. 1952. The share of wages in national income. Econ. J. 62:246253–77
    [Google Scholar]
36. Bustos P. 2011. Trade liberalization, exports, and technology upgrading: evidence on the impact of MERCOSUR on Argentinian firms. Am. Econ. Rev. 101:1304–40
    [Google Scholar]
37. Caballero RJ, Hammour ML. 1998. The macroeconomics of specificity. J. Political Econ. 106:4724–67
    [Google Scholar]
38. Castro Vincenzi JM, Kleinman B 2020. Intermediate input prices and the labor share Work. Pap., Princeton Univ. Princeton, NJ:
    [Google Scholar]
39. Cheng H, Jia R, Li D, Li H 2019. The rise of robots in China. J. Econ. Perspect. 33:271–88
    [Google Scholar]
40. Chirinko RS. 2008. σ: the long and short of it. J. Macroecon. 30:2671–86
    [Google Scholar]
41. Chirinko RS, Fazzari SM, Meyer AP. 2011. A new approach to estimating production function parameters: the elusive capital–labor substitution elasticity. J. Bus. Econ. Stat. 29:4587–94
    [Google Scholar]
42. Ciminelli G, Duval R, Furceri D. 2020. Employment protection deregulation and labor shares in advanced economies. Rev. Econ. Stat. In press. https://doi.org/10.1162/rest_a_00983
    [Crossref] [Google Scholar]
43. Cobb CW, Douglas PH. 1928. A theory of production. Am. Econ. Rev. 18:1139–65
    [Google Scholar]
44. Cohen L, Early S. 2018. Globalization and De-Unionization in Telecommunications: Three Case Studies in Resistance Ithaca, NY: Cornell Univ. Press
    [Google Scholar]
45. Dao MC, Das M, Koczan Z, Lian W. 2017. Why is labor receiving a smaller share of global income? Theory and empirical evidence Work. Pap., Int. Monet. Fund Washington, DC:
    [Google Scholar]
46. Dauth W, Findeisen S, Suedekum J, Woessner N. 2021. The adjustment of labor markets to robots. J. Eur. Econ. Assoc. 19:63104–53
    [Google Scholar]
47. De Loecker J, Eeckhout J, Unger G. 2020. The rise of market power and the macroeconomic implications. Q. J. Econ. 135:2561–644
    [Google Scholar]
48. De Loecker J, Warzynski F. 2012. Markups and firm-level export status. Am. Econ. Rev. 102:62437–71
    [Google Scholar]
49. De Ridder M. 2019. Market power and innovation in the intangible economy Work. Pap., Lond. Sch. Econ. London:
    [Google Scholar]
50. Denison EF. 1962. The Sources of Economic Growth in the United States and the Alternatives Before Us Washington, DC: Comm. Econ. Dev.
    [Google Scholar]
51. Dinlersoz E, Greenwood J. 2016. The rise and fall of unions in the United States. J. Monet. Econ. 83:129–46
    [Google Scholar]
52. Dinlersoz E, Wolf Z. 2018. Automation, labor share, and productivity: plant-level evidence from U.S. manufacturing Work. Pap., Cent. Econ. Stud., US Census Bur. Washington, DC:
    [Google Scholar]
53. Dixon J, Hong B, Wu L. 2021. The robot revolution: managerial and employment consequences for firms. Manag. Sci. 67:95586–605
    [Google Scholar]
54. Doraszelski U, Jaumandreu J. 2019. Using cost minimization to estimate markups Work. Pap., Boston Univ. Boston, MA:
    [Google Scholar]
55. Drautzburg T, Fernández-Villaverde J, Guerrón-Quintana P. 2017. Bargaining shocks and aggregate fluctuations NBER Work. Pap. 23647
    [Google Scholar]
56. Drautzburg T, Fernández-Villaverde J, Guerrón-Quintana P. 2021. Bargaining shocks and aggregate fluctuations. J. Econ. Dyn. Control 127:104121
    [Google Scholar]
57. Eden M, Gaggl P. 2019. Capital composition and the declining labor share CESifo Work. Pap. 7996, Cent. Econ. Stud. Munich, Ger:.
    [Google Scholar]
58. Edmond C, Midrigan V, Xu DY. 2018. How costly are markups? NBER Work. Pap 24800
    [Google Scholar]
59. Eisfeldt AL, Falato A, Xiaolan MZ. 2021. Human capitalists NBER Work. Pap 28815
    [Google Scholar]
60. Elsby MWL, Hobijn B, Şahin A. 2013. The decline of the U.S. labor share. Brook. Pap. Econ. Act. Fall:1–63
    [Google Scholar]
61. Farber HS. 2005. Nonunion wage rates and the threat of unionization. ILR Rev. 58:3335–52
    [Google Scholar]
62. Farber HS, Herbst D, Kuziemko I, Naidu S. 2018. Unions and inequality over the twentieth century: new evidence from survey data NBER Work. Pap. 24587
    [Google Scholar]
63. Feenstra RC, Hanson GH 2003. Global production sharing and rising inequality: a survey of trade and wages. Handbook of International Trade E Kwan Choi, J Harrigan 146–85 Oxford, UK: Blackwell
    [Google Scholar]
64. Ganapati S. 2021. Growing oligopolies, prices, output, and productivity. Am. Econ. J. Microecon. 13:3309–27
    [Google Scholar]
65. Glover A, Short J. 2020. Can capital deepening explain the global decline in labor's share?. Rev. Econ. Dyn. 35:35–53
    [Google Scholar]
66. Gollin D. 2002. Getting income shares right. J. Political Econ. 110:2458–74
    [Google Scholar]
67. Gomme P, Rupert P. 2004. Measuring labor's share of income Policy Discuss. Pap. 14593, Fed. Reserve Bank Cleveland Cleveland, OH:
    [Google Scholar]
68. Gouin-Bonenfant E 2020. Productivity dispersion, between-firm competition, and the labor share Work. Pap., Columbia Univ. New York:
    [Google Scholar]
69. Graetz G, Michaels G. 2018. Robots at work. Rev. Econ. Stat. 100:5753–68
    [Google Scholar]
70. Greenwood J, Hercowitz Z, Krusell P. 1997. Long-run implications of investment-specific technological change. Am. Econ. Rev. 87:3342–62
    [Google Scholar]
71. Grossman GM, Helpman E, Oberfield E, Sampson T. 2017. Balanced growth despite Uzawa. Am. Econ. Rev. 107:41293–312
    [Google Scholar]
72. Grossman GM, Helpman E, Oberfield E, Sampson T. 2021. Endogenous education and long-run factor shares. Am. Econ. Rev. Insights 3:2215–32
    [Google Scholar]
73. Gutiérrez G. 2017. Investigating global labor and profit shares Work. Pap., New York Univ. New York:
    [Google Scholar]
74. Gutiérrez G, Philippon T. 2017. Declining competition and investment in the U.S NBER Work. Pap 23583
    [Google Scholar]
75. Gutiérrez G, Piton S. 2020. Revisiting the global decline of the (non-housing) labor share. Am. Econ. Rev. Insights 2:3321–38
    [Google Scholar]
76. Hall RE. 1988. The relation between price and marginal cost in U.S. industry. J. Political Econ. 96:5921–47
    [Google Scholar]
77. Harper MJ, Berndt ER, Wood DO. 1989. Rates of return and capital aggregation using alternative rental prices. Technology and Capital Formation DW Jorgenson, R Landau 331–72 Cambridge, MA: MIT Press
    [Google Scholar]
78. Hartman-Glaser B, Lustig H, Xiaolan MZ. 2016. Capital share dynamics when firms insure workers NBER Work. Pap 22651
    [Google Scholar]
79. Helpman E. 2018. Globalization and Inequality Cambridge, MA: Harvard Univ. Press
    [Google Scholar]
80. Herrendorf B, Herrington C, Valentinyi A. 2015. Sectoral technology and structural transformation. Am. Econ. J. Macroecon. 7:4104–33
    [Google Scholar]
81. Hershbein B, Macaluso C, Yeh C. 2020. Monopsony in the US labor market Work. Pap., Fed. Reserve Bank Richmond Richmond, VA:
    [Google Scholar]
82. Holmes TJ, Levine DK, Schmitz JA 2012. Monopoly and the incentive to innovate when adoption involves switchover disruptions. Am. Econ. J. Microecon. 4:31–33
    [Google Scholar]
83. Hopenhayn H, Neira J, Singhania R. 2018. From population growth to firm demographics: implications for concentration, entrepreneurship and the labor share NBER Work. Pap 25382
    [Google Scholar]
84. Hsieh C-T, Rossi-Hansberg E. 2019. The industrial revolution in services NBER Work. Pap 25968
    [Google Scholar]
85. Hubmer J. 2020. The race between preferences and technology Work. Pap., Univ. Pa. Philadelphia:
    [Google Scholar]
86. Hulten CR. 1992. Growth accounting when technical change is embodied in capital. Am. Econ. Rev. 82:4964–80
    [Google Scholar]
87. Humlum A. 2010. Robot adoption and labor market dynamics Work. Pap., Princeton Univ. Princeton, NJ:
    [Google Scholar]
88. Jarosch G, Nimczik JS, Sorkin I. 2019. Granular search, market structure, and wages NBER Work. Pap 26239
    [Google Scholar]
89. Jeon Y, Kwon CW. 2017. The offshoring threat and wage negotiations: theory and evidence. Jpn. World Econ. 45:19–29
    [Google Scholar]
90. Jeon Y, Kwon CW. 2021. Offshoring, the threat effect, and wage inequality. Int. J. Econ. Theory 17:2135–50
    [Google Scholar]
91. Johnson DG. 1954. The functional distribution of income in the United States, 1850–1952. Rev. Econ. Stat. 36:2175–82
    [Google Scholar]
92. Jones BF, Liu X. 2021. A framework for economic growth with capital-embodied technical change. Work. Pap., Northwestern Univ. Evanston, IL:
    [Google Scholar]
93. Jorgenson DW, Griliches Z. 1967. The explanation of productivity change. Rev. Econ. Stud. 34:3249–83
    [Google Scholar]
94. Jorgenson DW, Griliches Z. 1972. Issues in growth accounting: a reply to Edward F. Denison. Surv. Curr. Bus. 52:565–94
    [Google Scholar]
95. Kaldor N. 1961. Capital accumulation and economic growth. The Theory of Capital: Proceedings of a Conference Held by the International Economic Association DC Hague 177–222 London: Palgrave Macmillan
    [Google Scholar]
96. Karabarbounis L, Neiman B. 2014. The global decline of the labor share. Q. J. Econ. 129:161–103
    [Google Scholar]
97. Karabarbounis L, Neiman B. 2019. Accounting for factorless income. NBER Macroecon. Annu. 33:167–228
    [Google Scholar]
98. Kehrig M, Vincent N. 2021. The micro-level anatomy of the labor share decline. Q. J. Econ. 136:21031–87
    [Google Scholar]
99. Keynes JM. 1939. Relative movements of real wages and output. Econ. J. 49:19334–51
    [Google Scholar]
100. Koch M, Manuylov I, Smolka M. 2021. Robots and firms. Econ. J. 131:6382553–84
     [Google Scholar]
101. Koh D, Santaeulàlia-Llopis R, Zheng Y. 2020. Labor share decline and intellectual property products capital. Econometrica 88:62609–28
     [Google Scholar]
102. Kravis IB. 1962. The Structure of Income: Some Quantitative Essays Philadelphia: Univ. Pa. Press
     [Google Scholar]
103. Krusell P, Ohanian LE, Ríos-Rull J-V, Violante GL 2000. Capital-skill complementarity and inequality: a macroeconomic analysis. Econometrica 68:51029–53
     [Google Scholar]
104. Kuznets S. 1959. Quantitative aspects of the economic growth of nations: IV. Distribution of national income by factor shares. Econ. Dev. Cult. Change 7:3 Part 21–100
     [Google Scholar]
105. Kuznets S, Epstein L, Jenks E 1941. National Income and Its Composition, 1919–1938, Vol. 1 Cambridge, MA: NBER
     [Google Scholar]
106. Lashkari D, Bauer A, Boussard J. 2021. Information technology and returns to scale Work. Pap., Boston Coll., Chestnut Hill MA:
     [Google Scholar]
107. Lawrence RZ. 2015. Recent declines in labor's share in US income: a preliminary neoclassical account NBER Work. Pap 21296
     [Google Scholar]
108. Leblebicioğlu A, Weinberger A. 2021. Openness and factor shares: Is globalization always bad for labor?. J. Int. Econ. 128:103406
     [Google Scholar]
109. Li D, Bental B. 2019. A generalized growth model and the direction of technological progress Work. Pap., Tongji Univ. Shanghai, China:
     [Google Scholar]
110. Lipsius B. 2018. Labor market concentration does not explain the falling labor share Work. Pap., Univ. Mich. Ann Arbor:
     [Google Scholar]
111. Manning A. 2012. Monopsony in Motion Princeton, NJ: Princeton Univ. Press
     [Google Scholar]
112. Nakamura E, Steinsson J. 2018. Identification in macroeconomics. J. Econ. Perspect. 32:359–86
     [Google Scholar]
113. Oberfield E, Raval D. 2021. Micro data and macro technology. Econometrica 89:2703–32
     [Google Scholar]
114. Olley GS, Pakes A. 1996. The dynamics of productivity in the telecommunications equipment industry. Econometrica 64:61263–97
     [Google Scholar]
115. Prager E, Schmitt M. 2021. Employer consolidation and wages: evidence from hospitals. Am. Econ. Rev. 111:2397–427
     [Google Scholar]
116. Ramey VA. 2017.. “Demographics and Robots” by Daron Acemoglu and Pascual Restrepo Discuss. Pap., Univ. Calif. San Diego: https://econweb.ucsd.edu/∼vramey/research/Ramey-discussion-Acemoglu-Restrepo-Robots.pdf
     [Google Scholar]
117. Raval D. 2020. Testing the production approach to markup estimation Work. Pap., Fed. Trade Comm. Washington, DC:
     [Google Scholar]
118. Rinz K. 2018. Labor market concentration, earnings inequality, and earnings mobility CARRA Work. Pap., Cent. Econ. Stud., US Census Bur. Washington, DC:
     [Google Scholar]
119. Rognlie M. 2015. Deciphering the fall and rise in the net capital share: accumulation or scarcity?. Brook. Pap. Econ. Act. Spring1–69
     [Google Scholar]
120. Rognlie M. 2019. Comment on “Accounting for factorless income. .” In NBER Macroeconomics Annual 2018Vol. 33:ed. M Eichenbaum, JA Parker, pp. 235–48 Chicago: Univ. Chicago Press
     [Google Scholar]
121. Rosenfeld J. 2014. What Unions No Longer Do Cambridge, MA: Harvard Univ. Press
     [Google Scholar]
122. Rossi-Hansberg E, Sarte PD, Trachter N. 2021. Diverging trends in national and local concentration. NBER Macroecon. Annu. 35:115–50
     [Google Scholar]
123. Rothstein JS. 2016. When Good Jobs Go Bad: Globalization, De-Unionization, and Declining Job Quality in the North American Auto Industry New Brunswick, NJ: Rutgers Univ. Press
     [Google Scholar]
124. Schmitz JA Jr. 2005. What determines productivity? Lessons from the dramatic recovery of the U.S. and Canadian iron ore industries following their early 1980s crisis. J. Political Econ. 113:3582–625
     [Google Scholar]
125. Schubert G, Stansbury A, Taska B. 2021. Employer concentration and outside options Work. Pap., Harvard Univ. Cambridge, MA:
     [Google Scholar]
126. Smith A. 1776. An Inquiry into the Nature and Causes of the Wealth of Nations London: W. Strahan & T. Cadell
     [Google Scholar]
127. Smith D, Ocampo S. 2021. The evolution of U.S. retail concentration. BLS Work. Pap. 526, US Bur. Labor Stat. Washington, DC:
     [Google Scholar]
128. Smith M, Yagan D, Zidar O, Zwick E. 2019. Capitalists in the twenty-first century. Q. J. Econ. 134:41675–745
     [Google Scholar]
129. Smith M, Yagan D, Zidar O, Zwick E. 2021. The rise of pass-throughs and the decline of the labor share Work. Pap., Princeton Univ. Princeton, NJ:
     [Google Scholar]
130. Solow RM. 1957. Technical change and the aggregate production function. Rev. Econ. Stat. 39:3312–20
     [Google Scholar]
131. Stansbury A, Summers LH. 2020. The declining worker power hypothesis: an explanation for the recent evolution of the American economy NBER Work. Pap 27193
     [Google Scholar]
132. Sun C. 2020. Multinational production with non-neutral technologies. J. Int. Econ. 123:103294
     [Google Scholar]
133. Syverson C. 2004. Market structure and productivity: a concrete example. J. Political Econ. 112:61181–222
     [Google Scholar]
134. Syverson C. 2019. Macroeconomics and market power: context, implications, and open questions. J. Econ. Perspect. 33:323–43
     [Google Scholar]
135. Taschereau-Dumouchel M. 2020. The union threat. Rev. Econ. Stud. 87:62859–92
     [Google Scholar]
136. Traina J. 2018. Is aggregate market power increasing? Production trends using financial statements Work. Pap., Univ. Chicago Chicago:
     [Google Scholar]
137. vom Lehn C. 2018. Understanding the decline in the U.S. labor share: evidence from occupational tasks. Eur. Econ. Rev. 108:191–220
     [Google Scholar]
138. Weitzman ML. 1976. On the welfare significance of national product in a dynamic economy. Q. J. Econ. 90:1156–62
     [Google Scholar]
139. Yeaple SR. 2005. A simple model of firm heterogeneity, international trade, and wages. J. Int. Econ. 65:11–20
     [Google Scholar]