30 Questions
What is the labor share of a firm, as defined in the context of this analysis?
The ratio of payroll to sales.
What is the general relationship between labor share and firm size, according to Figure 5?
Negative.
What is the purpose of the OLS regressions in Equation (2)?
To estimate the relationship between the change in labor share and the change in industrial concentration.
How are firms defined in this analysis, in terms of multiple establishments and industries?
A firm is the sum of all establishments that belong to the same parent company and industry.
What is the function of the time dummies (⌧t) in Equation (2)?
To control for time-specific effects.
What is the primary source of data used to measure international trends in the labor share?
KLEMS (industry level panel dataset)
What is the effect of clustering at the industry level on the standard errors in the OLS regressions?
It allows for the standard errors to be correlated over time.
What is the purpose of using the UN Comtrade Database in the study?
To construct adjusted measures of industry concentration that account for changes in the size of the domestic market
What is the outcome of the process of aggregating industries in the study?
Time-consistent 1987 SIC-based codes
How are the six-digit HS product codes converted to 1987 SIC codes in the study?
Using a crosswalk from Autor, Dorn, and Hanson (2013)
What is the period covered by the firm-level balance sheet data used in the study?
2000-2012
How many country groups are used to categorize imports in the study?
Six
What is the argument presented by Elsby, Hobjin, and Sahin (2013) regarding the labor share in the U.S. industries?
The labor share declines the most in U.S. industries that were strongly affected by increasing imports, such as from China.
In which sectors, aside from manufacturing, do the authors observe a decline in labor's share?
The authors observe a decline in labor's share in largely non-traded sectors such as wholesale trade, retail trade, and utilities.
What do the authors find regarding the role of trade in the decline of labor share in manufacturing industries?
The authors do not find that manufacturing industries with greater exposure to exogenous trade shocks differentially lose labor share relative to other manufacturing industries.
What do Elsby, Hobjin, and Sahin (2013) and Piketty (2014) stress as an additional factor contributing to the decline in labor share?
Elsby, Hobjin, and Sahin (2013) and Piketty (2014) stress the role of social norms and labor market institutions, such as unions and the real value of the minimum wage.
What is the limitation of the existing empirical evidence on the labor share, according to the authors?
The existing empirical evidence is largely based on macroeconomic and industry-level variation, which makes it harder to shed light on the distinctive implications of competing theories.
What is the contribution of the authors to the existing literature on the labor share?
The authors provide microeconomic evidence on the evolution of labor shares at the firm and establishment level.
What is the dominant term contributing to the fall in the labor share according to Table 17?
The between incumbent reallocation component
How many times does the within incumbent component contribute to a fall in the labor share in the 31 possible 5-year differences?
5
What is the main driver of the decline in the labor share according to Elsby, Hobjin and Sahin (2013)?
Within rather than between sector movements
Why is the analysis performed at the firm level appealing?
Because it closely aligns with the model
What is the result of conducting the decomposition analysis at the establishment level as reported in Appendix Table A.1?
Qualitatively similar patterns
What is the purpose of the robustness tests mentioned in the text?
To test the decomposition findings
What changes have large dominant employers made in their boundaries, and how has this affected the labor share?
They have increasingly used domestic outsourcing to contracting firms, temporary help agencies, and independent contractors and freelancers, which has directly reduced the labor share by saving on wage premia and reducing bargaining power of workers.
What is the effect of outsourcing threats and increased labor market competition on workers' bargaining power?
It reduces the bargaining power of both in-house and outsourced workers in occupations subject to outsourcing threats.
What is the relationship between firm wage effects and person effects (skills) in the context of wage inequality?
There is a rising correlation between firm wage effects and person effects, which accounts for a significant portion of the increase in U.S. wage inequality since 1980.
What is the 'fissuring of the workplace' and how does it relate to the rise of superstar firms?
It is the practice of large dominant employers using domestic outsourcing to contracting firms, temporary help agencies, and independent contractors and freelancers, leading to a rise in superstar firms and a decline in the labor share.
What is the potential avenue of future research suggested by the text?
Linking the rise of superstar firms and the fall of the labor share with the trends in inequality between employees.
What is the effect of domestic outsourcing on the wage premia typically paid by large high-wage employers?
It saves on the wage premia, leading to a direct reduction in the labor share.
This quiz examines the relationship between international trade and labor share in US industries, exploring the role of trade shocks and imports on labor share decline. It compares the findings of Elsby, Hobjin, and Sahin (2013) with alternative research results. Test your understanding of the intersection of trade and labor economics.
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