What is the Impact of Investment on Labor Income?
This study investigates empirically the determinants of labor shares focusing on the role of investment and exchange rate volatility. The authors use a system GMM panel approach and consider 34 Organization for Economic Co-operation and Development...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/762081529306116899/What-is-the-impact-of-investment-on-labor-income-background-note-for-the-South-Africa-systematic-country-diagnostic http://hdl.handle.net/10986/30033 |
| Summary: | This study investigates empirically the
determinants of labor shares focusing on the role of
investment and exchange rate volatility. The authors use a
system GMM panel approach and consider 34 Organization for
Economic Co-operation and Development (OECD) countries along
with South Africa for the period 1995-2015. The authors
results reveal that the level of a country’s investment is a
significant factor driving changes in the labor share of
income. This evidence is in line with the theoretical
mechanism for the role of investment presented by Lawrence
(2015). While the authors consider several other factors,
suggested by the extant empirical literature, the authors
only find evidence for the degree of a country’s exposure to
the international financial system, which is inversely
related with labor shares. This study is a background note
for the South Africa systematic country diagnostic. |
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