Fields / Paul Labor Income Share in Asia

Conceptual Issues and the Drivers
1. Auflage 2019
ISBN: 978-981-13-7803-4
Verlag: Springer Singapore
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, 269 Seiten, eBook

Reihe: ADB Institute Series on Development Economics

This is the first study that puts together a comprehensive and in-depth analysis of the drivers of the labor income share across a number of countries in Asia. This book provides an insightful companion to the study of labor income shares that plays a vital role in understanding the relationship between national income and personal income, and the relationship between wage inequality and wealth inequality. The timing of the book is ideal, as the ongoing debate over a global decline in the labor income share is far from settled. To this extent, evidence from the Asian countries is mixed.  The labor income share in some Asian countries has been rising since the 1990s. The purpose of this edited volume is to gain more insights on the potential drivers of the Asian experience. The first half of the book pays attention to the measurement problems related to the earnings of self-employed and workers in the informal sector. Then it puts together country case studies examining a wide range of factors driving the labor income share in Asia.

Zielgruppe

Research

Autoren/Hrsg.

Fields, Gary

Paul, Saumik

Inhaltsverzeichnis

1;Preface;6
2;Contents;8
3;1 Previous Literature and New Findings;10
3.1;1 Previous Literature;10
3.1.1;1.1 Measurement Issues;10
3.1.1.1;1.1.1 Attempts Have Mostly been Made to Estimate Labor Income Share at the National Level, not at a More Disaggregated Level (Sector or Firm);10
3.1.1.2;1.1.2 Various Adjustment Methods Have been Suggested to Approximate the Labor Income Share;11
3.1.2;1.2 Theoretical Considerations in Labor’s Changing Income Share;12
3.1.2.1;1.2.1 The Assumption of a Non-unitary Elasticity of Substitution (?) Between Capital and Labor Plays a Crucial Role in the Movement of the Labor Income Share;12
3.1.2.2;1.2.2 Using the Model Just Presented in Eqs. (1)–(4), a Fall in the Relative Price of Capital Produces a Declining Labor Income Share Provided that Capital and Labor are Gross Substitutes at the Aggregate Level (i.e., {\sigma }_{{\rm Agg}} \gt 1). However, in the Case of More Than One Skill Category of Labor, It Is Possible for the Labor Income Share to Decrease When the Relative Price of Capital Falls Even When Capital and Labor are Gross Complements at the Aggregate Level;13
3.1.3;1.3 Empirical Findings in the Literature;14
3.1.3.1;1.3.1 Both Within Sector Growth and the Process of Structural Transformation are Responsible for the Movements in the Labor Income Share;14
3.1.3.2;1.3.2 Technological Advancement, Measured by the Long-Term Decline in the Relative Price of Investment Goods, Has been the Largest Contributor to the Decline in Labor Income Shares in Advanced Economies;15
3.1.3.3;1.3.3 There is Considerable Diversity in the Movement in the Sectoral Labor Income Share Across Advanced Economies; the Highest Decline in Labor Income Share (in Terms of Percentage Point Differences) in Services and Manufacturing was in Japan and Portugal, Respectively;16
3.1.3.4;1.3.4 We Now Turn to Changes in Labor Income Share at a More Disaggregated Sectoral Level. In Japan, the Labor Income Shares Remained Almost Constant in Heavy Manufacturing and Light Manufacturing Whereas the Other Sectors Showed Downward Trends in the Period from 1970 to 2010.;17
3.1.3.5;1.3.5 In the People’s Republic of China, There is a Steady Downward Labor Income Share Trend in Government (GOV) and Mining (MIN) Sectors Since the Early 1990s, Whereas Wholesale and Retail Trade (WRT) and Finance, Insurance and Related Business Services (FIRE) Show an Upward Trend;18
3.1.3.6;1.3.6 Across the Asian Countries, Most Sectors Experienced a Decline in Labor Share of Income in Recent Years, Except China Where Most Sectors Experienced an Increase in the Labor Income Share in Recent Years;18
3.2;2 The Contributions of the Chapters in This Volume;19
3.2.1;2.1 Part I. Conceptual Issues;19
3.2.2;2.2 Part II. The Drivers of Labor Income Share;21
3.3;References;23
4;Conceptual Issues;24
5;2 Does the Exposure to Routinization Explain the Evolution of the Labor Share of Income? Evidence from Asia;25
5.1;Abstract;25
5.2;1 Introduction;25
5.2.1;1.1 Motivations;29
5.3;2 Exposure to Routinization: Stylized Evidence for Asia;31
5.4;3 Linking the Exposure to Routinization to the Labor Share of Income: Mechanisms;34
5.4.1;3.1 Relative Price of Investment Goods;36
5.4.2;3.2 Occupational Distribution of Employment;36
5.5;4 Globalization and the Offshoring of Routine Tasks;37
5.6;5 Exploring the Impact of the Exposure to Routinization on the Labor Share of Income;39
5.7;6 Conclusions;42
5.8;References;43
6;3 The Labor Share of Income Around the World: Evidence from a Panel Dataset;46
6.1;Abstract;46
6.2;1 Introduction;46
6.3;2 Problems of Definition and Alternative Approaches;47
6.3.1;2.1 LS1: The Unadjusted Labor Share;49
6.3.2;2.2 LS2: A Rule of Thumb;49
6.3.3;2.3 LS3: The Self-employed as Workers;50
6.3.4;2.4 Self-employment as the Rest of the Economy;50
6.3.5;2.5 LS5: Using Data on Workforce Composition;51
6.3.6;2.6 LS6: A New Adjustment;52
6.3.7;2.7 Alternative Methods;53
6.4;3 The Dataset;53
6.5;4 Results;56
6.5.1;4.1 Global Trends;56
6.5.2;4.2 Economy-Level Data;59
6.6;5 Concluding Remarks;78
6.7;Appendix;79
6.8;References;84
7;4 Technology, Market Regulations, and Labor Share Dynamics;87
7.1;Abstract;87
7.2;1 Introduction;87
7.3;2 Empirical Approach;90
7.4;3 Data Description and Summary Statistics;91
7.5;4 Regression Results;96
7.5.1;4.1 Baseline Specification;96
7.5.2;4.2 Accounting for Institutional Factors;99
7.6;5 Policy Implications and Conclusions;103
7.7;Appendix;103
7.7.1;Econometric Method;103
7.8;References;105
8;5 Globalization, Structural Transformation, and the Labor Income Share;108
8.1;Abstract;108
8.2;1 Introduction;108
8.3;2 Data;112
8.4;3 Trade Liberalization and the Labor Income Share: Descriptive Evidence;116
8.4.1;3.1 Evidence at the Country Level;116
8.4.2;3.2 Evidence at the Sectoral Level;124
8.5;4 Structural Transformation and the Labor Income Share: Descriptive Evidence;128
8.5.1;4.1 Skill-Biased Structural Transformation and the Labor Income Share;128
8.5.2;4.2 Structural Transformation and Labor Income Share in Japan, 1970–2010;129
8.5.2.1;4.2.1 Descriptive Evidence Using Japan Industrial Productivity (JIP) Data;130
8.5.2.2;4.2.2 A Shift-Share Decomposition Analysis;133
8.6;5 Regression Outcomes on Sectoral Labor Income Share, Trade, and Structural Transformation;135
8.6.1;5.1 Empirical Analysis at the Country Level;135
8.6.2;5.2 Empirical Analysis at the Sectoral Level;140
8.7;6 Conclusion;149
8.8;Appendix 1: Year of Trade Liberalization and Sample Period;150
8.9;References;153
9;6 Democracy and the Labor Share of Income: A Cross-Country Analysis;156
9.1;Abstract;156
9.2;1 Introduction;156
9.3;2 Political Institutions and the Labor Income Share: A Literature Review;158
9.3.1;2.1 Theoretical Background;158
9.3.2;2.2 Empirical Evidence;159
9.4;3 Econometric Methodology, Empirical Specification, and Data;160
9.4.1;3.1 The Measurement of the Labor Income Share;160
9.4.2;3.2 Empirical Strategy;160
9.4.3;3.3 The Data;161
9.5;4 Some Stylized Facts;163
9.5.1;4.1 Overview of the Data;163
9.5.2;4.2 Democracy and the Labor Income Share: A Preliminary Analysis;163
9.6;5 Econometric Results;168
9.6.1;5.1 Benchmark Estimation;168
9.6.2;5.2 Empirical Concern: Endogeneity;171
9.7;6 Concluding Remarks;177
9.8;References;178
10;The Drivers of Labor Income Share;182
11;7 Trade, Labor Share, and Productivity in India’s Industries;183
11.1;Abstract;183
11.2;1 Introduction;184
11.3;2 Indian Economy and Productivity Growth;188
11.4;3 Trade and Labor Share;191
11.5;4 Empirical Analysis;193
11.5.1;4.1 Descriptive;193
11.5.2;4.2 Empirical Framework;198
11.5.3;4.3 Estimation Method;201
11.5.4;4.4 Results;202
11.6;5 Concluding Remarks;205
11.7;References;206
12;8 What Explains the Increase in the Labor Income Share in Malaysia?;210
12.1;Abstract;210
12.2;1 Introduction;211
12.3;2 Labor Income Share in Malaysia;211
12.3.1;2.1 Trends Since 2005;211
12.3.2;2.2 Co-movement with Income Inequality;215
12.4;3 Shift-Share Analysis;215
12.4.1;3.1 By Economic Sectors;215
12.4.2;3.2 By Firm Sizes;218
12.4.3;3.3 Summary Findings of the Shift-Share Analysis;218
12.5;4 Factors Affecting the Labor Income Share in Malaysia;219
12.5.1;4.1 Model Specification;221
12.5.2;4.2 Results;221
12.6;5 Conclusion: Policy Discussion;222
12.7;Acknowledgements;226
12.8;Appendix 1: Data Sources and Descriptions;226
12.9;Appendix 2: Shift-Share Analysis;227
12.10;Appendix 3: Twenty-One Economic Subsectors, Categorization of Workers by Skill Level, and Manufacturing and Service Subsectors;227
12.11;Appendix 4: Formal Treatment of the Relevant Production Function;229
12.12;Appendix 5: Further Details of the Econometric Analysis;231
12.13;References;232
13;9 Institutions, Deindustrialization, and Functional Income Distribution in Japan;234
13.1;Abstract;234
13.2;1 Introduction;234
13.3;2 Data and Preliminary Empirics;236
13.4;3 Empirical Model and Econometric Methods;238
13.5;4 Results;240
13.6;5 Final Remarks and Policy Advice;245
13.7;Appendix A: Industry Aggregates;246
13.8;References;246
14;10 A Microeconomic Analysis of the Declining Labor Share in Japan;249
14.1;Abstract;249
14.2;1 Introduction;249
14.3;2 The Drivers of the Labor Share: Literature Background;251
14.4;3 Empirical Model and Estimation Strategy;254
14.5;4 Data and Summary Statistics;256
14.6;5 Econometric Results;257
14.6.1;5.1 Benchmark Estimations;257
14.6.2;5.2 Estimation with Sector-Level Variables;261
14.7;6 Concluding Remarks;265
14.8;Appendix;266
14.9;References;267