The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration

Speaker
Elhanan Helpman
Date
15/05/2018 - 13:00 - 11:30Add To Calendar 2018-05-15 11:30:00 2018-05-15 13:00:00 The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration  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 à la Ben Porath (1967) and capital-skill com- plementarity à 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 cal- ibrate the key parameters describing the balanced growth path to U.S. data for the early postwar 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 U.S. labor share. Building 504 (Economics), Seminar room 011 אוניברסיטת בר-אילן - Department of Economics Economics.Dept@mail.biu.ac.il Asia/Jerusalem public
Place
Building 504 (Economics), Seminar room 011
Affiliation
Harvard
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 à la Ben Porath (1967) and capital-skill com-
plementarity à 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 cal-
ibrate the key parameters describing the balanced growth path to U.S. data for the early
postwar 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 U.S.
labor share.

Attached file

Last Updated Date : 08/05/2018