Work

A decomposition of the labor share decline in the US business sector

Year: 2025

Type: preprint

Abstract: Based on the calibration of a simple model, we decompose the decline in the labor share into four structural components: task displacement, labor rents, capital rents, and labor-capital substitution effect. Our estimation suggests that task displacement and the switch of distributed rents from labor to capital are the main drivers of the labor share decline over the past three decades. On the other hand, the neoclassical substitution effect seems not to have a long term impact on the labor share.

Source: HAL

Authors: Bazot, Guillaume, Guerreiro, David

Institutions: Aix-Marseille Sciences Economiques, Université Paris 8

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

Funders: Aix-Marseille Université, Agence Nationale de la Recherche

Awards: G1190173965, G2659019386, Aix-Marseille School of Economics, G6803667113