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Determinants of the Wage Share: A Panel Analysis of Advanced and Developing Economies
Author(s) -
Stockhammer Engelbert
Publication year - 2017
Publication title -
british journal of industrial relations
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.665
H-Index - 70
eISSN - 1467-8543
pISSN - 0007-1080
DOI - 10.1111/bjir.12165
Subject(s) - financialization , retrenchment , economics , globalization , welfare state , wage , developing country , panel data , wage share , labour economics , welfare , odds , market economy , politics , economic growth , efficiency wage , medicine , logistic regression , public administration , political science , law , econometrics
Wage shares have declined substantially in all OECD countries and most developing economies since 1980. This study uses a new ILO/IILS dataset on adjusted wage shares for a panel of up to 43 developing and 28 advanced economies (1970–2007) to explain changes in wage shares and assess the relative contributions of technological change, financialization, globalization and welfare state retrenchment. We find strong negative effects of financialization as well as negative effects of welfare state retrenchment. Globalization has (in production) robust negative effects in advanced as well as in developing economies, which is at odds with the Stolper–Samuelson theorem. We find small, and for developing countries positive effects of technological change. Our results support a Political Economy approach to explaining income distribution.