<p>Is there a link between the level of the labor share and growth? </p>

<p>In standard models growth is the rate of (labor augmenting) technical progress and labor force. So does that mean if the labor share was .7 in one economy and .3 in an otherwise equivalent economy that there would be no difference in equilibrium growth rates?</p>

<p>I ask because there is a lot of literature of the link between inequality and growth (although not always steady state growth) but not a link between labor share and growth, despite the fact that the correlation between inequality (the Gini) and the labor share is presumably very high.</p>

CC BY-SA 4.0
2018-08-23T10:19:35.167Z
Are you simply looking for an answer of your question in the 2nd para under the [Solow model](https://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model)? That's actually pretty simple and probably considered a "homework question" here. The rest of your question (first line & 3rd para) is a lot broader, but I'm not sure a survey of the field is really what you want to hear.
fantastic peace and prosperity
CC BY-SA 4.0
2018-08-23T11:58:04.930Z
OP here. Yes, a survey would be fine. I think you posted a link earlier which was taken down. But I think it was a good source.
user19132
<labor-economics><economic-growth><inequality>
labor share and growth
user19132
# labor share and growth

(Asked by: username_0 on 2018-08-22)

Is there a link between the level of the labor share and growth?

In standard models growth is the rate of (labor augmenting) technical progress and labor force. So does that mean if the labor share was .7 in one economy and .3 in an otherwise equivalent economy that there would be no difference in equilibrium growth rates?

I ask because there is a lot of literature of the link between inequality and growth (although not always steady state growth) but not a link between labor share and growth, despite the fact that the correlation between inequality (the Gini) and the labor share is presumably very high.

**Tags:** labor-economics, economic-growth, inequality
> **Comments:**
> **username_1**: Are you simply looking for an answer of your question in the 2nd para under the [Solow model](https://en.wikipedia.org/wiki/Solow%E2%80%93Swan_model)? That's actually pretty simple and probably considered a "homework question" here. The rest of your question (first line & 3rd para) is a lot broader, but I'm not sure a survey of the field is really what you want to hear.  
> **username_0**: OP here. Yes, a survey would be fine. I think you posted a link earlier which was taken down. But I think it was a good source.  

---

## 0 answers

