[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-112989-en":3,"doc-seo-112989-105":29,"detail-sidebar-cat-0-en-105":91},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":20,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},112989,13056703020460,"Valentina","https://ap-avatar.wpscdn.com/avatar/be000253dac470eee5d?_k=1778207105932848923",8,"Research & Report","Development and the Labor Share - Research Article","A U-shaped relationship between development and the labor share of income is examined using a panel dataset covering manufacturing sectors in developing countries. The analysis exploits broader coverage than prior work and extends results to 28 manufacturing subsectors, showing the same U-shaped pattern at both aggregate and subsector levels. The evidence implies the pattern is not driven solely by reallocation across subsectors. A simple model with duality and firm heterogeneity provides the theoretical rationale for the observed labor-share dynamics.","Pub lic Disclosure Authorized Pub lic Disclosure Authorized  \nThe World Bank Economic Review, 34(1), 2020, 232–257 doi: 10.1093/wber/lhy001 Article  \nDevelopment and the Labor Share  \nPaul Maarek and Elsa Orgiazzi  \nAbstract  \nA U-shaped relationship between development and the labor share of income is brought to light. To do so, a panel dataset on the labor share in the manufacturing sector of developing countries is exploited. This dataset has greater coverage than the ones of previous studies focusing on developing countries. These data are also available at the disaggregated level for 28 manufacturing subsectors. This allows us to show that the U-shaped pattern of the labor share is also observed at the subsector level, suggesting that it does not correspond toreallocation forces across manufacturing subsectors during the development process. Standard theories of development economics that feature duality in the labor market easily generate such a pattern.  \nJEL classification: E25, J42, O17  \nKeywords: development, labor share, dual labor market  \nThere is a vast literature, both theoretical and empirical, linking income inequality to economic development, starting with Kuznets (1955) and examining a potential inverted U-shaped pattern of inequality along the development path. In this paper, an original perspective concerning this debate is adopted by focusing on the labor share of income; that is, the ratio of wage bill to value added. The example of China is illustrative. Since the beginning of the economic boom, the increase of wages has not been as high as the spectacular increase of productivity. This has reinforced competitiveness in the industry. Conversely, during the past few years, wages have increased substantially more than productivity. For example, according to the Chinese National Bureau of Statistics, Chinese private sector wages rose by 14 percent in 2012 asthe result of the labor market. As shown in this paper, this pattern may be inherent to the development process and is not specific to the China case. Panel data with total wage bill and value added are used atthe manufacturing sector level (hereafter “aggregate level”) and also in the 28 manufacturing subsectors. The labor share follows a U-shaped relationship at the aggregate manufacturing level and also within the 28 manufacturing subsectors. This suggests that the wedge between productivity and wages observed atthe aggregate manufacturing level is only partially the result of composition effects that are likely to occur during the development process.  \nThese empirical findings are then rationalized with the help of a simple model that illustrates our stylized fact. It is now established that dualism in the organization of production activities is pervasive in developing countries (DCs) where traditional, low-productivity methods of production coexist with  \nElsa Orgiazzi (corresponding author) is assistant professor at Université de Rennes I, France, and is a member of CREM; her email address [is Elsa.Orgiazzi@univ-rennes1.fr. Paul Maarek is Professor](is Elsa.Orgiazzi@univ-rennes1.fr. Paul Maarek is Professor) at Université Panthéon Assas, Paris 2 and is a member of LEMMA. His email adress [is paul.maarek@u-paris2.fr. The authors](is paul.maarek@u-paris2.fr. The authors) thank Jo Thori Lind, Bruno Decreuse, Gilbert Cette, Pierre Cahuc, Rémi Baziller, Mickaël Melki, Gani Aldashev, Cecilia García Peñalosa, and Andrew Newman, as well as participants at the 2014 ASSET conference, at the 2011 LAGV, at the 2014 Applied Econometrics Workshop in Alicante, and at the seminars of the Universities of Orléans, Nancy, Rennes 1, and Le Mans. A supplementary online appendix for this article is available at The World Bank Economic Review website.  \n© The Author(s) 2019 . Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / THE WORLD BANK.  \nAll rights reserved. For permissions, please e-mail: [journals.per","cbCaiufFMsDlwO3K","https://ap.wps.com/l/cbCaiufFMsDlwO3K","pdf",783302,1,26,"English","en",105,"# Abstract\n## Empirical approach and dataset\n## U-shaped labor share across sectors\n## Interpretation via development-economics theory","[{\"question\":\"What relationship does the paper study between development and the labor share?\",\"answer\":\"The paper investigates a U-shaped relationship between development and the labor share of income across the development process.\"},{\"question\":\"How does the paper use data to test whether the pattern is sector-wide or more specific?\",\"answer\":\"It uses panel data for the manufacturing sector and also disaggregates the analysis into 28 manufacturing subsectors, verifying the U-shaped pattern at both levels.\"},{\"question\":\"Why does the paper argue the pattern is not simply due to reallocation across manufacturing subsectors?\",\"answer\":\"Because the U-shaped pattern persists at the subsector level, it suggests the labor-share dynamics do not arise only from shifting production across subsectors during 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relationship does the paper study between development and the labor share?","Question",{"text":75,"@type":76},"The paper investigates a U-shaped relationship between development and the labor share of income across the development process.","Answer",{"name":78,"@type":73,"acceptedAnswer":79},"How does the paper use data to test whether the pattern is sector-wide or more specific?",{"text":80,"@type":76},"It uses panel data for the manufacturing sector and also disaggregates the analysis into 28 manufacturing subsectors, verifying the U-shaped pattern at both levels.",{"name":82,"@type":73,"acceptedAnswer":83},"Why does the paper argue the pattern is not simply due to reallocation across manufacturing subsectors?",{"text":84,"@type":76},"Because the U-shaped pattern persists at the subsector level, it suggests the labor-share dynamics do not arise only from shifting production across subsectors during 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