What鈥檚 Really Hurting the American Worker
As the US labor share declines, many people blame globalization and automation, but Chicago Booth鈥檚 Simcha Barkai has a different view.
What鈥檚 Really Hurting the American WorkerPaper Declining Labor and Capital Shares
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.
Published in: Journal of Finance
- Authored by
- 2019
- Labor Market
Read the Research in Chicago Booth Review