The Impact of the Productivity Dispersion Across Employers on the Labor's Income Share

12 Pages Posted: 2 Jul 2016 Last revised: 26 Jan 2021

See all articles by Damir Stijepic

Damir Stijepic

Johannes Gutenberg University Mainz

Date Written: December 17, 2018

Abstract

I study the distribution of income across the factors of production within the canonical on-the-job search framework. I show that, by weakening the competition between employers, a mean-preserving spread of the employers’ productivity distribution decreases the share of the production output that the workers receive. This result is particularly intriguing in light of the rising productivity dispersion and the declining labor share in many countries.

Keywords: labor's share of income, factor income distribution, productivity dispersion, dynamic monopsonistic competition, on-the-job search

JEL Classification: J31, E25, D33

Suggested Citation

Stijepic, Damir, The Impact of the Productivity Dispersion Across Employers on the Labor's Income Share (December 17, 2018). Available at SSRN: https://ssrn.com/abstract=2803460 or http://dx.doi.org/10.2139/ssrn.2803460

Damir Stijepic (Contact Author)

Johannes Gutenberg University Mainz ( email )

Jakob-Welder-Weg 9
Mainz, 55128
Germany

HOME PAGE: http://www.damir.stijepic.com

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