Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63979 
Year of Publication: 
2006
Series/Report no.: 
ETLA Discussion Papers No. 1049
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
In contrast with the experiences of the UK and the US, the distribution of labour and capital income has changed sharply in favour of capital in most Continental European and Nordic countries during the past two decades. We examine forces behind the evolution of the aggregate labour share by analysing the dynamics of labour shares within and between firms/plants in the Finnish business sector. Using a decomposition method applied in labour economics and productivity analysis, we show that much of the decline in the aggregate labour share stems from the reallocation of resources between firms and plants, while labour shares at the firm/plant level have remained relatively stable.
Subjects: 
Factor income shares, wage policy, decomposition, productivity
JEL: 
J23
J24
D33
Document Type: 
Working Paper

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