Full text: Wirtschaft und Gesellschaft - 2016 Heft 4 (4)

Wirtschaft und Gesellschaft

42. Jahrgang (2016), Heft 4

Onaran, Ö., The Effect of Foreign Affiliate Employment on Wages, Employment, and the
Wage Share in Austria, in: Review of Political Economy 24/2 (2012) 251-271.
Onaran, Ö.; Bösch, V., The effect of globalization on the distribution of taxes and social
expenditures in Europe: Do welfare state regimes matter?, in: Environment and
PlReferences.

Abstract
There has been a significant decline in the share of wages in GDP in both developed and
developing countries since the 1980s. This paper analyses the determinants of the wage
share (labour compensation as a ratio to value added) using sectoral data for Austria, while
also comparing our results with selected OECD countries.
We compile a comprehensive sector-level dataset of nine OECD countries (Austria, Denmark, France, Germany, Italy, Spain, Sweden, the UK, the US) for the period of 1970 to
2011, which allows us to trace the developments in the wage share across high and low
skilled sectors and within manufacturing and service industries.
Our findings lend strong support to the political economy approach to functional income
distribution. Technological change had an impact, especially in Austria, Italy, the US, but
the effects are not robust with respect to the use of different specifications and the wage
share in most countries in our sample appears to be driven by different variables reflecting
the bargaining power of labour such as union density, adjusted bargaining coverage and
government spending. The relevance of these variables differs considerably across countries, lending support to our approach of country specific estimations.
We find that globalisation had a strong impact on the wage share in all countries. The
effect of globalisation on the wage share was least strong in Denmark. In Austria, Germany,
and to a lesser extent in the UK, the effect is due to outward FDI and intermediate import
penetration which reflects the impact of international outsourcing practices. Intermediate
imports penetrations had no significant impact in Spain while FDI played a smaller role in
France and the US. Different institutional variables appear to be relevant for each country.
Germany exhibits the most robust positive effect of union density on the wage share, while
the decline in union density explains roughly 80 percent of the decline of the wage share in
Austria. Conversely, collective bargaining coverage, together with social government
spending, plays a more important role in France, the UK and the US. Financialisation had
the most pronounced effect in Austria, the UK and the US, while it appears to be also relevant in Germany. We find mixed results for the effect of personal income inequality on the
wage share. However, there is indicative confirmation for a negative effect in Austria, Germany, the UK and the US.

Zusammenfassung
Seit den Achtzigerjahren kam es zu einem signifikanten Rückgang der Lohnquote, also
des Lohnanteils am Bruttoinlandsprodukt, sowohl in den entwickelten als auch in den Entwicklungsländern. In dieser Studie werden die Ursachen dieses Rückgangs anhand von
Branchendaten aus unterschiedlichsten OECD Staaten untersucht, wobei für Österreich
eine vertiefende Analyse erfolgt. Zunächst wird ein umfassender Branchendatensatz
erstellt, der Informationen von 1970 bis 2011 für neun OECD-Länder (Dänemark, Deutschland, Frankreich, Italien, Österreich, Schweden, Spanien, UK und die USA) umfasst. Die
Verwendung von Branchen-Länderdaten erlaubt uns unterschiedliche Entwicklungen für
Sektoren mit hohen und geringen Qualifikationsanforderungen getrennt nach Fertigungs-

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