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Research Master Pre-Defense

The Declining Labour Share: Markups and Reallocation in the Input-Output Network

  • Series
    Research Master Defense
  • Speaker(s)
    Elliott Weder , Elliott Weder
  • Location
    Tinbergen Institute Amsterdam, room 1.60
    Amsterdam
  • Date and time

    August 23, 2023
    15:00 - 16:30

There is no clear consensus about the cause of the declining US labour share in recent decades. I use a unifying multi-sector model to show rising sectoral markups account for the majority of the decline. The reorganisation of the input-output network - who buys from whom - towards sectors with high labour shares has the effect of raising the aggregate labour share. Therefore, in contrast to previous studies in the literature, reallocation between sectors, arising from the shifting input-output network, constitutes another quantitatively relevant source for changes to the labour share.