Capital heterogeneity and the decline of the labour share

O'Mahony, Mary, Vecchi, Michela ORCID: and Venturini, Francesco (2021) Capital heterogeneity and the decline of the labour share. Economica, 88 (350) . pp. 271-296. ISSN 0013-0427 [Article] (doi:10.1111/ecca.12356)

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We investigate the decline of the labour share in a world characterized by increasing heterogeneity of capital assets. Our results show that, over the 1970-2007 period, the decline of the labour share has been mainly driven by Information and Communication Technology (ICT) assets and is mitigated by increasing investments in R&Dbased knowledge assets. Extending to other forms of intangible capital from 1995 onwards, we find that intangible investments related to innovation increase the labour share while those related to the organisation of firms contribute to its decline, particularly for the low and intermediate skilled workers. Our results are robust to an array of econometric issues, namely heterogeneity, cross-sectional dependence, and endogeneity

Item Type: Article
Research Areas: A. > Business School > Economics
Item ID: 31206
Notes on copyright: This is the peer reviewed version of the following article: O’Mahony, M., Vecchi, M. and Venturini, F. (2020), Capital Heterogeneity and the Decline of the Labour Share. Economica. , which has been published in final form at This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
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Depositing User: Michela Vecchi
Date Deposited: 29 Oct 2020 10:31
Last Modified: 16 Mar 2021 14:03

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