Cookies?
Library Header Image
LSE Research Online LSE Library Services

The productivity slowdown and the declining labor share: a neoclassical exploration

Grossman, Gene M., Helpman, Elhanan, Oberfield, Ezra and Sampson, Thomas (2017) The productivity slowdown and the declining labor share: a neoclassical exploration. CEP Discussion Papers (CEPDP1504). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

[img]
Preview
Text - Published Version
Download (802kB) | Preview

Abstract

We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early post-war period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the US labor share

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/
Additional Information: © 2017 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Employment, and Investment > E25 - Aggregate Factor Income Distribution
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O40 - General
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 30 Jan 2018 16:30
Last Modified: 09 May 2019 23:22
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/86597

Actions (login required)

View Item View Item

Downloads

Downloads per month over past year

View more statistics