Rising labor share of income is associated with faster subsequent productivity growth: Coefficient and standard errors from regression of change in labor share on subsequent two-year average productivity growth
Note: Aggregate labor share calculated as labor's share of corporate sector income, as described in the January 30, 2019 edition of the newsletter. "Full controls" in each regression include industry and year fixed-effects as well as industry-specific trends. The dot represents the coefficient value and the bars span two times the standard error of the regression estimate. MFP stands for multifactor productivity.
Source: Data from Bureau of Labor Statistics (BLS) Industry Productivity Series and unpublished Total Economy Productivity Series.
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