Determinants of the wage share: a panel analysis of advanced and developing economies

TY - JOUR

T1 - Determinants of the wage share

T2 - a panel analysis of advanced and developing economies

AU - Stockhammer, Engelbert

N1 - The paper is based on project ?New Perspectives on Wages and Economic Growth? for the International Labour Organisation (ILO). Earlier versions of this paper were presented at the Regulating for Decent Work conference, ILO, Geneva and at Kingston University.

PY - 2017/3/1

Y1 - 2017/3/1

N2 - Wage shares have declined substantially in all OECD countries and most developing economies since 1980. This study uses a new ILO/IILS dataset on adjusted wage shares for a panel of up to 43 developing and 28 advanced economies (1970–2007) to explain changes in wage shares and assess the relative contributions of technological change, financialization, globalization and welfare state retrenchment. We find strong negative effects of financialization as well as negative effects of welfare state retrenchment. Globalization has (in production) robust negative effects in advanced as well as in developing economies, which is at odds with the Stolper–Samuelson theorem. We find small, and for developing countries positive effects of technological change. Our results support a Political Economy approach to explaining income distribution.

AB - Wage shares have declined substantially in all OECD countries and most developing economies since 1980. This study uses a new ILO/IILS dataset on adjusted wage shares for a panel of up to 43 developing and 28 advanced economies (1970–2007) to explain changes in wage shares and assess the relative contributions of technological change, financialization, globalization and welfare state retrenchment. We find strong negative effects of financialization as well as negative effects of welfare state retrenchment. Globalization has (in production) robust negative effects in advanced as well as in developing economies, which is at odds with the Stolper–Samuelson theorem. We find small, and for developing countries positive effects of technological change. Our results support a Political Economy approach to explaining income distribution.

U2 - 10.1111/bjir.12165

DO - 10.1111/bjir.12165

M3 - Article

SN - 0007-1080

VL - 55

SP - 3

EP - 33

JO - British Journal of Industrial Relations

JF - British Journal of Industrial Relations

IS - 1

ER -