The Labor Share Squeeze in Latin America: A Dynamic Heterogeneous Approach
Global Economy Forum
This paper analyzes the long-run relationship between labor share and its determinants for 20 Latin American countries from 1980 to 2014. Using the pooled mean group estimator, we find evidence that technological change, the globalization process, and financial integration, have contributed to the decline of labor share in Latin America. We also find evidence of the importance of institutional factors and public spending for the labor share. Finally, we discuss the role of the informal sector on the dynamics of the decline. Our key findings are robust to various specifications and methodologies.
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Joy, R., Rodriguez, C. M., & Ruprah, I. J. The Labor Share Squeeze in Latin America: A Dynamic Heterogeneous Approach. Global Economy Journal.