Does the distribution of income between labor and capital affect economic growth?

Abstract

The work is devoted to obtaining quantitative estimates of the impact of the dis-tribution of income between labor and capital on the rate of economic growth in the modern world. We used UN data on a set of European countries, post-Soviet countries, Israel, Canada, the USA and Turkey. To assess the impact of the distribution of income between labor and capital on economic growth rates, linear econometric models of the dependence of economic growth rates on the share of labor force in GDP by years of the period from 2007 to 2019 built. The obtained results showed that the relationship between the rates of economic growth and the share of labor force in GDP in the mod-ern world is not significant, the influence of the share of labor force in GDP on econom-ic growth is negative, but declining obliquely, in recent years it has become insignificant. it can be expected that in the 2020s this influence may become positive. Outpacing wage growth rates can help increase labor productivity and accelerate economic growth in the transition to a post-industrial economy.