Internal Seminar: Giulio Zanella

Title: "The labor share and workers' share"

  • Date: 24 October 2023 from 13:00 to 14:00

  • Event location: Seminar Room - Piazza Scaravilli, 2 + Microsoft Teams Meeting

Abstract

When workers derive their incomes from ownership of multiple productive factors, labor's share of GDP has little bearing on income distribution. Workers' share of aggregate primary income is a more useful concept. Using household survey data from the Current Population Survey, I show that while the US labor share declined by 4.4 points during 1975-2021, workers' share actually increased by 1.2 points. The reason is that workers' capital income rose and more than compensated for labor income decline. Although such a rise is concentrated toward the top of the wage distribution, workers' share increased also at the bottom, but not in-between.