On the optimal labor income share
"Labor’s share of income has attracted interest in recent years reflecting its apparent decline. These falls, witnessed across many countries, are usually deemed undesirable. Any such assertion, however, begs the question of what is the socially optimal labor share. We address this question usi...
| Main Authors: | , , |
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| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Frankfurt am Main
2018
ECB |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19301808124911290809-on-the-optimal-labor-income-sh.htm |
| _version_ | 1771659897054691330 |
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| author | Growiec, Jakub McAdam, Peter Muck, Jakub |
| author_facet | Growiec, Jakub McAdam, Peter Muck, Jakub |
| collection | Library items |
| description | "Labor’s share of income has attracted interest in recent years reflecting its apparent decline. These falls, witnessed across many countries, are usually deemed undesirable. Any such assertion, however, begs the question of what is the socially optimal labor share. We address this question using a micro-founded endogenous growth model calibrated on US data. We find that in our central calibration the socially optimal labor share is 17% (11 pp) above the decentralized equilibrium, calibrated to match the average observed in history. We also study the dependence of both long-run growth equilibria on model parameters and relate our results to Piketty’s “laws of Capitalism”. Finally, we demonstrate that cyclical movements in factor income shares are socially optimal and that the decentralized equilibrium typically does not generate excess volatility." |
| format | TEXT |
| geographic | USA developed countries |
| id | 19301808124911290809_72ce48f8f97044feb6d8f47be4e2c204 |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19301808124911290809_72ce48f8f97044feb6d8f47be4e2c204 |
| is_hierarchy_title | On the optimal labor income share |
| language | English |
| physical | 35 p. Digital |
| publishDate | 2018 |
| publisher | Frankfurt am Main ECB |
| spellingShingle | Growiec, Jakub McAdam, Peter Muck, Jakub income economic growth income distribution technological change On the optimal labor income share |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=135053595323 |
| title | On the optimal labor income share |
| topic | income economic growth income distribution technological change |
| url | https://www.labourline.org/KENTIKA-19301808124911290809-on-the-optimal-labor-income-sh.htm |