Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Labour share in Switzerland remains constant

18.03.2014

The contribution of wages to total income in Switzerland has remained constant in the past 30 years. In other developed countries, in contrast, the labour share has fallen, a study supported by the Swiss National Science Foundation (SNSF) reveals. One reason for the stability of the Swiss labour share is the high level of education.

The revenues earned by companies are divided between the employees (in the form of wages) and the shareholders (in the form of profits). In economics, the contribution made by wages to the population’s total income is referred to as the labour share. It is a key indicator of how income is distributed within a country.

This is because the distribution of wage income in society is far more even than that of capital income, which is focused on a small group. A reduction in the labour share tends to lead, therefore, to greater levels of inequality in the national economy, and could weaken social cohesion.

Michael Siegenthaler, Tobias Stucki and Michael Graff of KOF Swiss Economic Institute at the ETH Zurich have investigated the development of the labour share in the countries of the Organisation for Economic Co-operation and Development (OECD) in recent decades. Switzerland apparently has an exceptional role: from 1980 to 2012, the labour share here has remained stable, whilst in most other OECD countries it has fallen.

In Switzerland, the share of wages in total income has been constantly between 65 and 70 per cent. In countries such as France, Italy, Japan, the USA and Sweden, in contrast, the labour share has fallen during the past 30 years from between 65 and 70 per cent to between 55 and 60 per cent.

High labour share due to high level of education


Using data from companies, the researchers investigated the factors that explain changes in the labour share. Alongside weaker trade unions, above all the increased use of computers and the Internet have been responsible for the decrease in the labour share of most OECD countries. “Routine tasks are being done more and more by computers, rather than by people,” says Michael Siegenthaler. This reduces the labour share of total income as in particular less well qualified employees are no longer needed.

In comparison with countries like Sweden or the USA, Switzerland slept through this technological revolution from 1980 to the mid 1990s. After this point, Switzerland was able to dampen the effects of the digital revolution on the labour share, in part owing to its high standards of education, with a relatively high number of qualified employees using computers to perform complex tasks.

Switzerland to lose its special position


Another key reason for Switzerland’s special position in respect of the labour share according to the researchers is the change in the industrial landscape. In the last 30 years, the Swiss industrial scene has moved less significantly towards sectors with low labour shares than has been the case in other countries. “Switzerland has specialised in knowledge-intensive sectors of industry and services that have above-average labour shares,” says Siegenthaler. This has counteracted the decrease in the labour share.

The researchers also investigated the possible future development of the labour share in Switzerland. Their assumption is that computerisation of the workplace will further increase and the power of the unions continue to fall. Therefore, Switzerland will probably have to cede its special position to a certain extent, as the labour share is likely to fall here too by 2020.

Publication
M. Siegenthaler, T. Stucki: Dividing the pie: the determinants of labor’s share of income on the firm level. KOF Working Paper No. 352, February 2014.

Weitere Informationen:

http://www.kof.ethz.ch/de/publikationen/p/kof-working-papers/352/
http://www.snf.ch/en/researchinFocus/newsroom/Pages/news-140318-mm-labour-share-...

Media - Abteilung Kommunikation | idw - Informationsdienst Wissenschaft

Further reports about: Development OECD countries decrease employees income responsible special technological

More articles from Studies and Analyses:

nachricht Real-time feedback helps save energy and water
08.02.2017 | Otto-Friedrich-Universität Bamberg

nachricht The Great Unknown: Risk-Taking Behavior in Adolescents
19.01.2017 | Max-Planck-Institut für Bildungsforschung

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Safe glide at total engine failure with ELA-inside

On January 15, 2009, Chesley B. Sullenberger was celebrated world-wide: after the two engines had failed due to bird strike, he and his flight crew succeeded after a glide flight with an Airbus A320 in ditching on the Hudson River. All 155 people on board were saved.

On January 15, 2009, Chesley B. Sullenberger was celebrated world-wide: after the two engines had failed due to bird strike, he and his flight crew succeeded...

Im Focus: Breakthrough with a chain of gold atoms

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

In the field of nanoscience, an international team of physicists with participants from Konstanz has achieved a breakthrough in understanding heat transport

Im Focus: DNA repair: a new letter in the cell alphabet

Results reveal how discoveries may be hidden in scientific “blind spots”

Cells need to repair damaged DNA in our genes to prevent the development of cancer and other diseases. Our cells therefore activate and send “repair-proteins”...

Im Focus: Dresdner scientists print tomorrow’s world

The Fraunhofer IWS Dresden and Technische Universität Dresden inaugurated their jointly operated Center for Additive Manufacturing Dresden (AMCD) with a festive ceremony on February 7, 2017. Scientists from various disciplines perform research on materials, additive manufacturing processes and innovative technologies, which build up components in a layer by layer process. This technology opens up new horizons for component design and combinations of functions. For example during fabrication, electrical conductors and sensors are already able to be additively manufactured into components. They provide information about stress conditions of a product during operation.

The 3D-printing technology, or additive manufacturing as it is often called, has long made the step out of scientific research laboratories into industrial...

Im Focus: Mimicking nature's cellular architectures via 3-D printing

Research offers new level of control over the structure of 3-D printed materials

Nature does amazing things with limited design materials. Grass, for example, can support its own weight, resist strong wind loads, and recover after being...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Booth and panel discussion – The Lindau Nobel Laureate Meetings at the AAAS 2017 Annual Meeting

13.02.2017 | Event News

Complex Loading versus Hidden Reserves

10.02.2017 | Event News

International Conference on Crystal Growth in Freiburg

09.02.2017 | Event News

 
Latest News

New pop-up strategy inspired by cuts, not folds

27.02.2017 | Materials Sciences

Sandia uses confined nanoparticles to improve hydrogen storage materials performance

27.02.2017 | Interdisciplinary Research

Decoding the genome's cryptic language

27.02.2017 | Life Sciences

VideoLinks
B2B-VideoLinks
More VideoLinks >>>