Does economic globalization cause the decline of the labor share: an empirical cross country analysis of manufacturing industry
Date
2020
Authors
Journal Title
Journal ISSN
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Publisher
University of Delaware
Abstract
I examine the empirical relationship between economic globalization (measured
by outsourcing) and the labor share in a panel of up to 40 countries and 14 two-digit
manufacturing industries covering a period from 1996 through 2012. Empirical studies
investigate the role of economic globalization in explaining labor share, by grouping
countries and industries into three groups: labor intensive vs capital intensive, skilled
vs unskilled labor force and labor market institutions. This study provides additional
empirical evidence to challenge the argument that economic globalization contributes
to the decline of the labor share. In particular, the positive correlation between the
labor share and economic globalization suggests that economic globalization might not
be the contributor to the decline of the labor share.
Description
Keywords
Economic globalization, Labor share, Manufacturing industry, Outsourcing