The labor income share in Mexico: analysis for the manufacturing industry, 2004-2019
Keywords:
Wage share, Technological progress, Market powerAbstract
This paper studies the labor income share in the manufacturing industry in Mexico, 2004-2019. The participation of wages in the added value measures the importance of the distribution of production that corresponds to work. It has been estimated that the wage share has declined since the 1980s. The objective is to find the determinants that explain the movement of the labor share in the industry and by group of low, medium and high technology manufacturing branches. A theoretical model and an empirical one with panel data are developed and the factors that explain the evolution of labor participation in the industry are analyzed. With data from the Economic Census, the results confirm that the wage share decreases due to factors related to technological progress and market power.
JEL Classification: J31, O33, D43.
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