Estimating the U.S. labor share

Giandrea, Michael D.; Sprague, Shawn

doi:10.21916/mlr.2017.7

Cited by 36 publications

(21 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…While the actual calculation of the share of total income accruing to labor input can sometimes prove problematic (see, e.g., Gollin ; Elsby, Hobijn, and Şahin ; Giandrea and Sprague ; and the references cited therein), the concept is easy to state. Define the wage share ( S ) and expand it as follows:

S = \frac{WL}{PY} = \frac{W false/ P}{Y false/ L} = ((), \frac{W / P}{\partial Y / \partial L}) ((), \frac{\partial Y / \partial L}{Y / L})

where W is the nominal wage, Y is real output, P is the output price, and L is labor input.…”

Section: The Approachmentioning

confidence: 99%

“…Both papers find (as do we) that productivity growth is underestimated if perfect competition is assumed. sometimes prove problematic (see, e.g., Gollin 2002;Elsby, Hobijn, andŞahin 2013;Giandrea and Sprague 2017; and the references cited therein), the concept is easy to state. Define the wage share (S) and expand it as follows:…”

Section: A Labor's Share Market Power and The Elasticity Of Outputmentioning

confidence: 99%

See 1 more Smart Citation

Labor's Share, the Firm's Market Power, and Total Factor Productivity

Dixon

Lim

2018

Economic Inquiry

View full text Add to dashboard Cite

We investigate the relationship between labor's share, firm's market power, and the elasticity of output with respect to labor input using an approach based on an unobserved components model. The approach yields time‐varying estimates of market power and the elasticity. Evidence on the market power of firms (which we find to be rising since 2000) gives a deeper understanding of movements in labor's share and the labor wedge. The generated values of the elasticity yield revised estimates of total factor productivity growth which is informative about the extent of the downward bias inherent in traditional estimates which use labor's share as a proxy for the elasticity. (JEL O47, C32, E25)

show abstract

S = \frac{WL}{PY} = \frac{W false/ P}{Y false/ L} = ((), \frac{W / P}{\partial Y / \partial L}) ((), \frac{\partial Y / \partial L}{Y / L})

where W is the nominal wage, Y is real output, P is the output price, and L is labor input.…”

Section: The Approachmentioning

confidence: 99%

Section: A Labor's Share Market Power and The Elasticity Of Outputmentioning

confidence: 99%

Labor's Share, the Firm's Market Power, and Total Factor Productivity

Dixon

Lim

2018

Economic Inquiry

View full text Add to dashboard Cite

show abstract

“…The two natural candidates are α and d, as there exists evidence that neither of them has been constant over the postwar period. 18 Supporting evidence that the share of capital α has been steadily increasing (with cyclical variations) over the postwar period is highlighted in the following quote from Giandrea and Sprague (2017): "In the late 20th century-after many decades of relative stability-the labor share began to decline in the United States and many other economically advanced nations, and in the early 21st century it fell to unprecedented lows. " 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Similarly, our estimated state trajectory for ϕ (relative preference for consumption versus leisure), as illustrated in Figure 3 below, is broadly comparable with analyses of hours worked in the US.…”

Section: Model Specificationmentioning

confidence: 99%

Balanced Growth Approach to Tracking Recessions

Boczon

Richard

2020

Econometrics

View full text Add to dashboard Cite

In this paper, we propose a hybrid version of Dynamic Stochastic General Equilibrium models with an emphasis on parameter invariance and tracking performance at times of rapid changes (recessions). We interpret hypothetical balanced growth ratios as moving targets for economic agents that rely upon an Error Correction Mechanism to adjust to changes in target ratios driven by an underlying state Vector AutoRegressive process. Our proposal is illustrated by an application to a pilot Real Business Cycle model for the US economy from 1948 to 2019. An extensive recursive validation exercise over the last 35 years, covering 3 recessions, is used to highlight its parameters invariance, tracking and 1- to 3-step ahead forecasting performance, outperforming those of an unconstrained benchmark Vector AutoRegressive model.

show abstract

“…{H 0 , H 1 } 16. For the construction of these series, see Giandrea and Sprague (2017). denote the (o q × n ) selection matrices and include the slope coefficients of the measurement equations.…”

Section: B State Space and Likelihoodmentioning

confidence: 99%

The U.S. Labor Income Share and Automation Shocks

Charalampidis

2019

Economic Inquiry

View full text Add to dashboard Cite

The causes and consequences of the 1964–2016 swings in the U.S. labor income share/labor share (LS) are parsed through the lens of a structural model estimated on aggregate and LS series jointly. Where conventional models fall short, the present model yields a counter‐cyclical LS unconditionally and in response to demand and monetary policy shocks, as well as a small wage pro‐cyclicality, via moderate wage indexation. Shifts in automation, workers' market power, investment efficiency, and the relative price of investment account for 54%, 24%, 6%, and 4% of LS fluctuations, respectively. Automation shocks explain the lion's share of the post‐2007 cyclical LS tumble and 11% of output cycles, and generate a distinctive counter‐cyclical labor response. (JEL E32, E25, E52)

show abstract

Estimating the U.S. labor share

Cited by 36 publications

References 0 publications

Labor's Share, the Firm's Market Power, and Total Factor Productivity

Labor's Share, the Firm's Market Power, and Total Factor Productivity

Balanced Growth Approach to Tracking Recessions

The U.S. Labor Income Share and Automation Shocks

Contact Info

Product

Resources

About