: 10.56472/25835238/IRJEMS-V4I12P116
M. Ataman Aksoy, Francis Ng. "Labor and Capital in Manufacturing: What Happened to Their Shares" International Research Journal of Economics and Management Studies, Vol. 4, No. 12, pp. 129-139, 2025. Crossref. http://doi.org/10.56472/25835238/IRJEMS-V4I12P116
Recent research shows that the share of labor has been decreasing and real manufacturing wages have been stagnant despite high labor productivity growth. This study analyzes the changes in labor and capital shares and the events and policies that caused these changes in the manufacturing sector in selected industrial countries – the USA, UK, France, Italy, Spain, Sweden, Japan, and the Republic of Korea – between 1970 and 2015. The results were mixed. Labor shares were high during the 1970s when commodity prices increased (capital shares decreased). In response, the stabilization/reform programs led to declines in labor share during the 1980s except for Japan and Korea. After the 1990s, Sweden, Korea, and Spain had one large decline in labor shares then stability. Two countries, Italy, and France, had increases in labor shares after 2000. USA is an exception where there is a continuous decline after the Reagan stabilization in 1981.
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[2] ----------------------------, 2017, “Limits to Trade Growth: Decomposing Manufacturing Trade,” International Journal of Economy and Finance, Vol. 9, No. 2, 122-132.
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[9] Country details of these developments are presented in Aksoy and Ng (2024).
[10] For example, in 1972, the share of value added in gross output was 37.9 percent in the USA, and 36.8 percent in Italy. By 1982, these ratios had declined to, 33.3, and 32.0 percent respectively. In most countries these correspond to a 10-15 percent increase in intermediate input costs that were not accommodated by product price and/or productivity increases.
Manufacturing Sectors and Shares, Manufacturing Distribution of Income, Labor and Capital, Wage and Productivity Growth, Manufacturing Profit Markup, Industrial Countries.