Economics, Econometrics and Finance
6 years ago

Shrinking manufacturing sector leads to decline in workers' wages.

RePEc: Research Papers in Economics
Sectoral Composition of Output and the Wage Share: a Two-Sector Kaleckian Model
Elton Beqiraj, Lucrezia Fanti, Luca Zamparelli

Paper Summary

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The article explores how the shift from manufacturing to the service sector can lead to a decrease in the wage share. By using a two-sector model, the researchers show that when mark-ups are higher in the service sector, a shift towards services can result in a rise in profits rather than wages.