Declining labour share in United States and Canada
University of New Brunswick
Contrary to standard economic thinking where it is assumed that factor shares are constant over time, significant amount of evidence suggests that this may not be the case. The focus of this report is to estimate the variation of labour shares for Canada and United States for the last eighty years. In addition, we look at the other national income components, labour share measurement issues, commercial and public sectors labour income shares as well as composition of the wage bill in order to determine possible sources of these changes. The results suggest that the labour shares have been declining for the United States since 1970s and for Canada since 1960s. It is also observed that the trend depends on the definition of labour income share.