Journal Article

Globalization, creative destruction, and labour share change: evidence on the determinants and mechanisms from longitudinal plant-level data

Petri Böckerman and Mika Maliranta

in Oxford Economic Papers

Volume 64, issue 2, pages 259-280
Published in print April 2012 | ISSN: 0030-7653
Published online July 2011 | e-ISSN: 1464-3812 | DOI: https://dx.doi.org/10.1093/oep/gpr031
Globalization, creative destruction, and labour share change: evidence on the determinants and mechanisms from longitudinal plant-level data

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The labour share of GDP has declined in recent decades in many leading economies. This paper examines the mechanisms of falling labour share using Finnish manufacturing plant-level data over three decades. Using a useful variant of the decomposition method, we make a distinction between the changes in the average plant and the micro-level restructuring. We show that micro-level restructuring is the link between the declining labour share and increasing productivity, and that increased international trade is a factor underlying those shifts.

Keywords: F16; J31

Journal Article.  7988 words.  Illustrated.

Subjects: International Trade ; Wages, Compensation, and Labour Costs

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