Explaining movements in the labor share

Samuel Bentolila, Gilles Saint-Paul

Research output: Contribution to journalArticlepeer-review


In this paper we study the evolution of the labor share in the OECD. We show it is essentially related to the capital-output ratio; that this relationship is shifted by factors like the price of imported materials or capital-augmenting technological progress: and that discrepancies between the marginal product of labor and the real wage -due to, e.g., labor adjustment costs or union wage bargaining- cause departures from it. We also provide empirical evidence on the determinants of the labor share with panel data on 13 industries and 12 countries for 1972-93.

Original languageEnglish (US)
Article number9
JournalContributions to Macroeconomics
Issue number1
StatePublished - 2003


  • Capital-output ratio
  • Labor share

ASJC Scopus subject areas

  • General Economics, Econometrics and Finance


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