Markups, Labor Market Inequality and the Nature of Work / Greg Kaplan, Piotr Zoch.

Format:

Book

Author/Creator:

Kaplan, Greg.

Contributor:

National Bureau of Economic Research.

Zoch, Piotr.

Series:

Working Paper Series (National Bureau of Economic Research) no. w26800.

NBER working paper series no. w26800

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

We demonstrate the importance of distinguishing between the traditional use of labor for production, versus alternative uses of labor for overhead, marketing and other expansionary activities, for studying the distribution of both factor income and labor income. We use our framework to assess the impact of changes in markups on the overall labor share and on labor income inequality across occupations. We identify the production and expansionary content of different occupations from the co-movement of occupational income shares with markup-induced changes in the labor share. We find that around one-fifth of US labor income compensates expansionary activities, and that occupations with larger expansionary content have experienced the fastest wage and employment growth since 1980. Our framework can rationalize a counter-cyclical labor share in the presence of sticky prices and can be used to study the distributional effects of demand shocks, monetary policy and secular changes in competition.

Notes:

Print version record

February 2020.