Endogenous Education and Long-Run Factor Shares

We study the determinants of factor shares in a neoclassical environment with capital-skill complementarity and endogenous education. In this environment estimates of the elasticity of substitution between capital and labor that fail to account for human capital levels will be biased upward. We develop a model with overlapping generations, technology-driven neoclassical growth, and ongoing increases in educational attainment. For a class of production functions featuring capital-skill complementarity, a balanced growth path exists and is characterized by an inverse relationship between the rates of capital-and labor-augmenting technological progress and the capital share in national income. (JEL D33, E25, J24, O33)

Slow real wage growth during the Industrial Revolution: productivity paradox or pro-rich growth?

abstract I examine the implications of technological change for productivity, real wages and factor shares during the industrial revolution using recently available data. This shows that real GDP per worker grew faster than real consumption earnings but labour’s share of national income changed little as real product wages grew at a similar rate to labour productivity in the medium term. The period saw modest total factor productivity growth which limited the growth both of real wages and of labour productivity. Economists looking for an historical example of rapid labour-saving technological progress having a seriously adverse impact on labour’s share must look elsewhere.

Social conflict, property rights, and the capital–labor split

I examine some political economy aspects of the capital–labor split. In a game-theoretic general equilibrium model, rent-seekers attempt to appropriate the output of manufacturing firms on the offensive end, while such firms safeguard their income on the defensive end. Then the presence of imperfect property rights is a breeding ground for social conflict and has two indirect consequences. First, it evens out changes in the gross (before-social-conflict) labor and capital shares of total output that are caused by changes in the aggregate factor endowments, leading to more rigid equilibrium factor shares. Second, if social conflict is more labor-intensive than manufacturing, weaker property rights lead to a larger equilibrium labor share.

Poor Laborers and Rich Capitalists? On the Evolution of Income Composition Inequality in Italy 1989-2016

We study the evolution of inequality in income composition in terms of capital and labor income in Italy between 1989 and 2016. We document a rise in the share of capital income accruing to the bottom of the distribution, whilst the top of the distribution increases its share of labor income. This implies a falling degree of income composition inequality in the period considered and, hence, the fact that Italy is moving away from being an economy composed of poor laborers and rich capitalists. This result is robust to the use of different definitions of capital and labor income. A falling degree of income composition inequality implies a weaker link between the functional and personal distributions of income. Therefore, fluctuations in the total factor shares of income are having an increasingly weaker impact on income inequality in Italy. Finally, we conceptualize a rule of thumb for policy makers seeking to reduce income inequality in the long run. This rule relates fluctuations in the total factor shares and the level of income composition inequality to the specific income source to be redistributed. (Stone Center on Socio-Economic Inequality Working Paper)

Citrus reticulata CrRAP2.2 Transcriptional Factor Shares Similar Functions to the Arabidopsis Homolog and Increases Resistance to Xylella fastidiosa

Xylella fastidiosa is a worldwide multihost pathogen that causes diseases in different crops. It is considered a new global threat and substantial efforts have been made in order to identify sources of resistance. Indeed, many genes have been associated with resistance to X. fastidiosa, but without functional validation. Here, we describe a C. reticulata gene homologous to the transcriptional factor RAP2.2 from Arabidopsis thaliana that increases resistance to citrus variegated chlorosis (CVC). This gene was previously detected in C. reticulata challenged with X. fastidiosa. Bioinformatics analysis together with subcellular localization and auto-activation assays indicated that RAP2.2 from C. reticulata (CrRAP2.2) is a transcriptional factor orthologous to AtRAP2.2. Thus, we used A. thaliana as a model host to evaluate the functional role of CrRAP2.2 in X. fastidiosa resistance. The inoculation of X. fastidiosa in the A. thaliana rap2.2 mutant resulted in a larger bacterial population, which was complemented by CrRAP2.2. In addition, symptoms of anthocyanin accumulation were higher in the mutant, whose phenotype was restored by CrRAP2.2, indicating that they have conserved functions in plant defense response. We therefore transformed C. sinensis with CrRAP2.2 and verified a positive correlation between CVC resistance and gene expression in transgenic lines. This is the first study using A. thaliana as model host that characterizes the function of a gene related to X. fastidiosa defense response and its application in genetic engineering to obtain citrus resistance to CVC.