Declining Labor and Capital Shares
Снижение долей труда и капитала
2020-04-27
SCID: 54.1/7jedwcks
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capital costscapital shareindustry concentrationlabor sharepure profits
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Abstract (AI)
ABSTRACT This paper presents direct measures of capital costs, equal to the product of the required rate of return on capital and the value of the capital stock. The capital share, equal to the ratio of capital costs and gross value added, does not offset the decline in the labor share. Instead, a large increase in the share of pure profits offsets declines in the shares of both labor and capital. Industry data show that increases in concentration are associated with declines in the labor share.
Key Findings
1
A substantial increase in the share of pure profits offsets declining labor and capital shares.
2
Industry-level evidence shows that increasing market concentration is associated with declining labor shares.
3
The capital share of gross value added does not rise enough to offset the observed decline in the labor share.
4
The paper constructs direct measures of capital costs as the required return on capital multiplied by the capital stock value.
Research Object
Labor and capital shares of gross value added across industries
Research Subject
The decline in labor and capital shares and its association with rising pure-profit shares and increased industry concentration
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2020-04-27
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