The Labor Share of Income around the World: Evidence from a Panel Dataset

Abstract

This study provides an evaluation of five different methodologies of estimation commonly used in the labor share literature and propose a new measurement. Theglobal dataset of the labor income share across 151 economies is compiled—both developing and developed—for all or part of the period 1970–2015. Results show that our suggested indicator is correlated to the other five measures but it also retains unique information. Contrary to the traditional assumption of stable factor shares, it documents the existence of considerable heterogeneity across economies and variability over time. Specifically, there has been a general decline in the labor share around the world, in particular from the mid-1980s onwards.