Declining Labor and Capital Shares

2020/04/27 by Simcha Barkai · 4 citations
Economics, Econometrics and Finance · #Fiscal Policy and Economic Growth #Economic Growth and Productivity #Monetary Policy and Economic Impact

paper · pdf · doi:10.1111/jofi.12909

openalex publication_date 2020/04/27 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/31

Abstract

ABSTRACT 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.

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