Technology, Market Regulations, and Labor Share Dynamics
O’Mahony, Mary; Vecchi, Michela; Venturini, Francesco | December 2018
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.
Citation
O’Mahony, Mary; Vecchi, Michela; Venturini, Francesco. 2018. Technology, Market Regulations, and Labor Share Dynamics. © Asian Development Bank Institute. http://hdl.handle.net/11540/9370.Keywords
Development Economics
Regional Economic Development
Economic Impact
Asian Development Bank
Development
Macroeconomic
Macroeconomic Analysis
Macroeconomic Framework
Macroeconomic Models
Macroeconomic Performance
Macroeconomic Planning
Macroeconomic Policies
Macroeconomic Reform
Macroeconomic Stabilization
Economies in transition
Economic agreements
Development indicators
ADB
Economic development
Gross domestic product
Employment
Economic forecast
Economic indicators
Growth models
Gross domestic product
Macroeconomics
Economic forecast
Social condition
Economic dependence
Economic assistance
Technology assessment
Comparative economics
Regional economics
Economic development projects
Open price system
Price fixing
Price regulation
Consumer price indexes
Financial crisis
Labor economics
Regional economics
Turnover
Economic survey
Income Distribution
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