Labor Share and Growth in the Long Run

49 Pages Posted: 25 Mar 2019

See all articles by Matthieu Charpe

Matthieu Charpe

International Labour Organization (ILO)

Slim Bridji

University of Applied Sciences and Arts, Northwestern Switzerland

Peter McAdam

European Central Bank (ECB)

Date Written: March 21, 2019

Abstract

This paper establishes some stylized facts of the long run relationship between growth and labor shares using historical data for the United States (1898-2010), the United Kingdom (1856-2010), and France (1896-2010). Performing individual country time-frequency analysis, we demonstrate the existence of long-term cycles in labor share of thirty to fifty years explaining a major part of the variance in the data. Further, the impact of labor share on growth changes sign with the frequency considered from negative at high frequencies to positive at low frequencies. Finally, the positive coefficient associated with the labor share at low frequencies increases over time.

Keywords: labor share, growth, income distribution, wavelet analysis

JEL Classification: E24, E25, N1

Suggested Citation

Charpe, Matthieu and Bridji, Slim and McAdam, Peter, Labor Share and Growth in the Long Run (March 21, 2019). ECB Working Paper No. 2251 (2019); ISBN 978-92-899-3513-5 , Available at SSRN: https://ssrn.com/abstract=3359498 or http://dx.doi.org/10.2139/ssrn.3359498

Matthieu Charpe (Contact Author)

International Labour Organization (ILO)

Route des Morillons 4
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Slim Bridji

University of Applied Sciences and Arts, Northwestern Switzerland ( email )

Riggenbachstrasse 16
Olten, 4600
Switzerland

Peter McAdam

European Central Bank (ECB) ( email )

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D-60311 Frankfurt am Main
Germany
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0044 69 1344 6000 (Fax)

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