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April 15, 2026Fiscal StudiesOpen Access

Latent changes in the labour share

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Authors

MGMaarten GoosEKEllen van't Klooster

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Overview

This analysis reveals how automation affects labour share trends in various sectors, suggesting that declines may not be inevitable.

Key Points

  • The study aims to explore the factors influencing changes in labour share, particularly the roles of automation and consumer demand.
  • Extended a single-sector automation model to a multi-sector framework.
  • Decomposed changes in the US labour share into within-sector and between-sector components.
  • Analysed equilibrium changes in consumer demand rooted in factor quantities and productivity.
  • Demonstrated that within-sector changes account for the majority of recent labour share declines.
  • Found that overall between-sector changes are quantitatively insignificant.
  • Highlighted that equilibrium consumer demand changes are substantial but offsetting, impacting future labour shares.

Cite This Study

Goos et al. (2026) studied this question.

synapsesocial.com/papers/69df2c1de4eeef8a2a6b10aehttps://doi.org/10.1111/1475-5890.70019
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