Labor Share, Capital Share, and Rents: A Macrohistorical Perspective

This chapter reviews the literature on value added distribution in a long-run perspective. In so doing, it discusses: (i) the measure of the labor and capital shares; (ii) the set of explanation behind the evolution of those ratios, whether this is due to labor and capital substitution effect, the automation and creation of new tasks, and the evolution of firms market power and markup; (iii) the consequences on inequalities, growth, and welfare. In all cases, historical series are used to enlighten the issue while historical events are proposed to document-specific mechanisms at work.