The earnings share of total incomein latin america, 1990-2010

Abeles, Martín; Amarante, Verónica; Vega, Daniel A.

doi:10.18356/336e8ad4-en

Cited by 8 publications

(4 citation statements)

References 27 publications

(20 reference statements)

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“…In econometric estimations for a panel of manufacturing industries, they find that among other variables the profit margin is positively correlated with the real exchange rate (the inverse of the real value of the peso) and the share of manufacturing exports in output. The marked fall in the labour share in Mexico since the early 2000s contrasts with the experience of countries like Argentina, Brazil, or Chilewhich had higher and more stable labour shares during the 2000s (see Abeles et al 2014)-and with the group of emerging market and developing countries as a whole-where the labour share fell in the early 2000s but then recovered (see International Monetary Fund 2017).…”

Section: Introductionmentioning

confidence: 98%

The decline of the labour share in Mexico, 1990-2015

Ibarra¹,

Ros²

2017

WIDER Working Paper

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This paper studies the decline of the labour share in Mexico during the period 1990-2015. It calculates the wage share and alternative measures of the labour income share (which includes labour income of the self-employed) for the whole economy, the private business sector, and its major economic sectors. It carries out a shift-share analysis showing that the decline in the labour share is mostly explained by reductions within the economy's major sectors (including within manufacturing, tradables, and non-tradables) rather than by a recomposition of value added towards those with low labour shares. It distinguishes within each major area of economic activity a modern wage-employment sector and an informal self-employment one. In contrast to agriculture-where the labour share fell due a shift of labour force towards the wage-employment sector-in other major areas of the economy the fall in the labour share is explained by reductions within the wage-employment sector. Econometric estimations indicate that parallel declines in the wage share and relative productivity of non-tradables and in the US manufacturing labour share all played a large role in the reduction of the manufacturing wage share in Mexico. More generally, the analysis suggests that the lagging productivity of the informal non-tradable sector of the economy-itself a reflection of the country's low aggregate rate of economic growth-is a crucial factor in the fall of the labour share in the formal sectors. The paper concludes by discussing possible explanations for the paradox of the slow rate of economic growth in Mexico despite the rise in the profit share, and by pointing out remaining challenges for reconciling the different sources of data in the calculation of the labour share in Mexico.

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Section: Introductionmentioning

confidence: 98%

The decline of the labour share in Mexico, 1990-2015

Ibarra¹,

Ros²

2017

WIDER Working Paper

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“…The production function exponents on capital, α = 0.29, and labor, θ = 0.35, are disciplined by the the share of income paid to capital and the earnings share of the right tail, since 1 − α − θ is the share of entrepreneurial income, which is captured in the tail. For Brazil, capital's share can be calculated from the Penn World Tables (PWT) 9.1, and over the years of interest it averages to be 0.40, the same value reported by Abeles, Amarante, and Vega (2015). 16 For the income tail, we target the fact that top 10% of earners receive 56% of total income, according to Morgan (2017).…”

Section: Calibrationmentioning

confidence: 99%

Dispersion in Financing Costs and Development

Cavalcanti¹,

Kaboski²,

Martins³

et al. 2021

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Most aggregate theories of financial frictions model credit available at a single cost of financing but rationed. However, using a comprehensive firm-level credit registry, we document both high levels and high dispersion in credit spreads to Brazilian firms. We develop a quantitative dynamic general equilibrium model in which dispersion in spreads arises from intermediation costs and market power. Calibrating to the Brazilian data, we show that, for equivalent levels of external financing, dispersion has more profound impacts on aggregate development than single-price credit rationing and yields firm dynamics that are more consistent with observed patterns.

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“…In Latin America, while the decline has been more moderate, barely exceeding 10% since 1993, it has also been gathering pace (ILO, 2011). Abeles, Amarante and Vega (2014) claim that the labour share of output is declining in most Latin American countries, even when the income of self-employed workers is considered. Alarco (2014Alarco ( , 2016Alarco ( and 2017) posits a common history in most Latin American countries, in which the wage share in 1950-2012 completes two cycles: the first cycle peaks in the mid-1960s, before dropping to a floor in the mid-1980s.…”

Section: Introductionmentioning

confidence: 99%

Reduction of the wage share of income and increasingly precarious employment

2022

CEPAL Review

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The earnings share of total incomein latin america, 1990-2010

Cited by 8 publications

References 27 publications

The decline of the labour share in Mexico, 1990-2015

The decline of the labour share in Mexico, 1990-2015

Dispersion in Financing Costs and Development

Reduction of the wage share of income and increasingly precarious employment

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