Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share

Arbeitspapier

Over the last two decades the share of national income which accrues to labour has followed a marked downward trend across a host of industrialised countries. This paper attempts to assess the importance of several potential causes of this phenomenon. We investigate compositional effects, the effect of declining trade costs, changes in the market structure (concentration) and the effect of low-wage competition between countries. Overall, the findings suggest that lower trade costs and factors related to economic integration such as industry concentration, the market power of firms and increased international low-wage competition indeed affect the labour share. However, their effect has been quite limited when compared to changes in the sectoral composition, the effects of technological change, cyclical factors and changes in the prices of intfirmediary goods.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: LICOS Discussion Paper ; No. 229

Classification and Topics

• Classification: Wirtschaft ; Wages, Compensation, and Labor Costs: General ; Aggregate Factor Income Distribution
• Subject: factor shares ; globalisation ; Wirtschaftsintegration ; Internationaler Wettbewerb ; Lohnquote ; Transportkosten ; Marktstruktur ; Dekompositionsverfahren ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Hutchinson, John ; Persyn, Damiaan
• Event: Veröffentlichung
• (who): Katholieke Universiteit Leuven, LICOS Centre for Institutions and Economic Performance
• (where): Leuven
• (when): 2009

Further information

• Handle: http://hdl.handle.net/10419/75018
• Last update: 10.03.2025, 11:43 AM CET