Skip to main content
SpringerLink
Log in

Functional Income Distribution in European Transition Countries

  • Chapter
Inequalities During and After Transition in Central and Eastern Europe

Part of the book series: Studies in Economic Transition ((SET))

Abstract

The labour share, the proportion of income that is distributed to workers, has been decreasing in most OECD countries since the mid-1980s, a phenomenon that has attracted much interest among economists and policy makers because of its implications for growth and welfare. In fact, the labour share is considered a measure of how the benefits of growth are distributed between labour and capital, and its decrease indicates that workers in a country are getting a declining share of the wealth produced within that country.

With thanks to Loredana Polezzi, Rita Wilson, Mona Baker, and Moira Inghilleri for their input and support.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Azmat, G., Manning, A. and Van Reenen, J. (2012) Privatization and the Decline of Labour’s Share: International Evidence from Network Industries. Economica. 79(315). pp. 470–492.

    Article  Google Scholar 

  • Bassanini, A. and Duval, R. (2009) Unemployment, Institutions, and Reform Complementarities: Re-assessing the Aggregate Evidence for OECD Countries. Oxford Review of Economic Policy. 25(1). pp. 40–59.

    Article  Google Scholar 

  • Bassanini, A. and Manfredi, T. (2012) Capital’s Grabbing Hand? A Cross-Country/ Cross-Industry Analysis ol the Decline ol the Labour Share. OECD Social, Employment and Migration Working Papers, 133. OECD Publishing.

    Google Scholar 

  • Bentolila, S. and Saint-Paul, G. (2003) Explaining Movements in the Labor Share. The B.E. Journal of Macroeconomics. 3(1). pp. 1–33.

    Google Scholar 

  • Blanchard, O. and Giavazzi, F. (2003) Macroeconomic Effects ol Regulation and Deregulation in Goods and Labor Markets. Quarterly Journal of Economics. 118(3). pp. 879–907.

    Article  Google Scholar 

  • Bloom, N., Draca, M. and Van Reenen, J. (2012) Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity. Stanford University, mimeo.

    Google Scholar 

  • Boeri, T. and Terrell, K. (2002) Institutional Determinants ol Labour Reallocation in Transition. Journal of Economic Perspectives. 16(1). pp. 51–78.

    Article  Google Scholar 

  • Borghans, L. and ter Weel, B. (2007) The Diffusion ol Computers and the Distribution ol Wages. European Economic Review. 51(3). pp. 715–748.

    Article  Google Scholar 

  • Bournakis, I., Vecchi, M. and Venturini, F. (2014) Offshoring, Specialization and Innovation. London: Middlesex University Business School.

    Google Scholar 

  • Brown, J.D., Earle, J.S. and Telegdy, A. (2008) Employment and Wage Effects of Privatisations: Evidence from Hungary, Romania, Russia and Ukraine. Economic Journal. 120(545). pp. 683–708.

    Article  Google Scholar 

  • Calvo, G.A. and Coricelli, R (1992) Stagflationary Effects of Stabilization Programs in Reforming Socialist Countries: Enterprise-Side and Household-Side Factors. World Bank Economic Review. 6(1). pp. 71–90.

    Article  Google Scholar 

  • Cazes, S. and Nesporova, A. (2003) Labour Markets in Transition: Balancing Flexibility and Security in Central and Eastern Europe. Geneva: ILO.

    Google Scholar 

  • Driscoll, J. and Kraay, A.C. (1998) Consistent Covariance Matrix Estimation with Spatially Dependent Data. Review of Economics and Statistics. 80. pp. 549–560.

    Article  Google Scholar 

  • Earle, J.S. (2006) Employment and Wages Effects of Privatisations: Evidence from Transition Economies. Employment Research Newsletter. 13(1). Upjohn Institute of Employment Research.

    Google Scholar 

  • EBRD (2013) Transition Report. London: European Bank of Reconstruction and Development.

    Google Scholar 

  • Elsby, M., Hobijn, B. and Sahin, A. (2013). The Decline of the U.S. Labor Share. Brookings Papers on Economic Activity. 47(2). pp. 1–63.

    Article  Google Scholar 

  • Estrin, S., Hanousek, J., Kocenda, E. and Svejnar, J. (2009) Effects of Privatisation and Ownership in Transition Economies. Policy Research Working Paper No. 48.11.

    Google Scholar 

  • Fernandes, A.M. (2009) Structure and Performance of the Service Sector in Transition Economies. Economics of Transition. 17(3). pp. 467–501.

    Article  Google Scholar 

  • Fialova, K. and Schneider, O. (2009) Labor Market Institutions and Their Effect on Labor Market Performance in the New EU Member Countries. Eastern European Economics. 47(3). pp. 57–83.

    Article  Google Scholar 

  • Foster-McGregor N, Poschl, J., Rincon-Aznar, A., Stehrer, R., Vecchi, M. and Venturini, F. (2013) Reducing Productivity and Efficiency Gaps: The Role of Knowledge Assets, Absorptive Capacity and Institutions. European Competitiveness Report, Background study.

    Google Scholar 

  • Gorodnichenko, Y. and Tesar, L. (2009) Border Effect or Country Effect? Seattle May Not Be So Far from Vancouver After All. American Economic Journal: Macroeconomics. 1(1). pp. 219–241.

    Google Scholar 

  • Guerriero, M. and Sen, K. (2012) What Determines the Share of Labour in National Income? A Cross-Country Analysis. IZA Discussion Paper No. 6643. Bonn: IZA.

    Google Scholar 

  • Gurgul, H. and Lach, L. (2014) Globalization and Economic Growth: Evidence from Two Decades of Transition in CEE. Economic Modelling. 36. pp. 99–107.

    Article  Google Scholar 

  • Gwartney J., Lawson, R. and Hall, J. (2013) Economic Freedom of the World 2013 Annual Report. Vancouver: The Fraser Institute.

    Google Scholar 

  • Haskel, J., Lawrence, R.Z., Learner, E.E., and Slaughter, M.J. (2012) Globalization and U.S. Wages: Modifying Classic Theory to Explain Recent Facts. Journal of Economic Perspectives. 26(2). pp. 119–40.

    Article  Google Scholar 

  • Havlik, P. (2005) Central and East European Industry in an Enlarged European Union: Restructuring, Specialisation and Catching-Up. Economie Internationale, CEPII Research Center. 102. pp. 107–132.

    Google Scholar 

  • Havlik, P., Leitner, S. and Stehrer, R. (2012) Growth Resurgence, Productivity Catching-Up and Labour Demand in CEECs. In Mas, M. and Stehrer, R. (eds). Industrial Productivity in Europe: Growth and Crisis. Chapter 8. London: Edward Elgar, pp. 219–263.

    Google Scholar 

  • Havrylchyk, O. and Jurzyk, E. (2010). Performance of Foreign Banks in Central and Eastern Europe. IMF Working Paper No. 4.

    Google Scholar 

  • Hoechle, D. (2007) Robust Standard Errors for Panel Regressions with Cross-Sectional Dependence. Stata Journal. 7(3). pp. 281–312.

    Google Scholar 

  • IILS (2011) Making Markets Work for Jobs. World of Work Report 2011. Geneva: ILO.

    Google Scholar 

  • ILO (2010). Wage Policies in Times of Crisis. Global Wage Report 2010/2011. Geneva.

    Google Scholar 

  • ILO (2012). Wages and Equitable Growth. Global Wage Report 2012/2013. Geneva.

    Google Scholar 

  • Inklaar, R. and Timmer, M.P (2013) Capital, Labor and TFP in PWT8.0. Groningen: Groningen Growth and Development Centre, University of Groningen.

    Google Scholar 

  • Izyumov, A. and Vahaly, J. (2014) Recent Trends in Factor Income Shares: A Global Perspective. Journal of Economic Studies. 41(5). pp. 696–707.

    Article  Google Scholar 

  • Karabarbounis, L. and Neiman, B. (2014) The Global Decline of the Labor Share. Quarterly Journal of Economics. 61. pp. 61–103.

    Article  Google Scholar 

  • Kohl, H. (2008) Where Do Trade Unions Stand in Eastern Europe Today? Stock-Taking After EU Enlargement. Internationale Politik und Gesellschaft. (3). pp. 107–127.

    Google Scholar 

  • Kornai, J. (2006) The Great Transformation of Central Eastern Europe: Success and Disappointment. Economics of Transition. 14(2). pp. 207–244.

    Article  Google Scholar 

  • Krueger, A.B. (1999) Measuring Labor’s Share. American Economic Review. 99(2). pp. 45–51.

    Article  Google Scholar 

  • Lawless, M. and Whelan, K.T. (2011) Understanding the Dynamics of Labor Shares and Inflation. Journal of Macroeconomics. 33(2). pp. 121–136.

    Article  Google Scholar 

  • Lehmann, H. and Muravyev, A. (2011) Labor Markets and Labor Market Institutions in Transition Economies. IZA Discussion Papers No. 5905. Bohn: IZA.

    Google Scholar 

  • Maskus, K.E., Neumann, R. and Seidel, T. (2012) How National and International Financial Development Affect Industrial R&D. European Economic Review. 56. pp. 72–83.

    Article  Google Scholar 

  • OECD (2012) Labour Losing to Capital: What Explains Declining Labour Shares? OECD Employment Outlook 2013. Paris.

    Google Scholar 

  • O’Mahony, M. and Timmer, M.R (2009) Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database. Economic Journal. 119. pp. F374–F403.

    Article  Google Scholar 

  • O’Mahony, M., Vecchi, M. and Venturini, F. (2015) The Long-Run Decline in Labor Share: Technology Versus Institutions. https://www.researchgate.net/publication/273101314_The_Long-Run_Decline_in_Labor_Share_Technology_versus_Institutions (last accessed 1 June 2015).

    Google Scholar 

  • Rajan, R.G. and Zingales, L. (1998) Financial Dependence and Growth. American Economic Review. 88(3). pp. 559–586.

    Google Scholar 

  • Svejnar, J. (2002) Transition Economies: Performance and Challenges. Journal of Economic Perspectives. 16(1). pp. 3–38.

    Article  Google Scholar 

  • World Bank (2002) Transition: The First Ten Years, Analysis and Lessons for Eastern Europe and the Former Soviet Union. New York: The World Bank.

    Book  Google Scholar 

Download references

Authors
  1. Ana Rincon-Aznar
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Michela Vecchi
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Francesco Venturini
    View author publications

    You can also search for this author in PubMed Google Scholar

Editor information

Editors and Affiliations

  1. University of Perugia, Italy

    Cristiano Perugini  & Fabrizio Pompei  & 

Copyright information

© 2015 Ana Rincon-Aznar, Michela Vecchi and Francesco Venturini

About this chapter

Cite this chapter

Rincon-Aznar, A., Vecchi, M., Venturini, F. (2015). Functional Income Distribution in European Transition Countries. In: Perugini, C., Pompei, F. (eds) Inequalities During and After Transition in Central and Eastern Europe. Studies in Economic Transition. Palgrave Macmillan, London. https://doi.org/10.1057/9781137460981_4

Download citation

Publish with us

Policies and ethics

Search

Navigation