A Panel Analysis of the Impact of Green Transformation and Globalization on the Labor Share in the National Income

Małgorzata Gawrycka,Anna Szymczak

doi:10.3390/en14216967

Małgorzata Gawrycka, Anna Szymczak

Open Access

https://doi.org/10.3390/en14216967

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Abstract

This study aims to examine the impact of green transition and globalization processes on changes in the labour share. The study covers 76 national economies diversified in development, global production share and energy transition stage from 2000 to 2018. Based on the Total Economy Database data, panel models of the relationship between green transition, globalization and the labour share in the national income were estimated. The conducted Breusch–Pagan and Hausman tests proved the validity of using fixed-effects models. We confirmed the research hypothesis that the openness of the economy contributes to a decline in the labour share. The openness of the economy resulting from globalization reduces the labour share in the national income. We do not confirm hypotheses that suggest energy transition contributes to a reduction in the labour share and that the labour share will decline in the post-crisis period due to the lower bargaining power of workers. Changes in the labour share should be of interest to government representatives who influence the shape and implementation of economic policy, especially in employment policy, education, and investment policy, mainly aimed at the green transformation.

Highlights

Despite the dynamic growth of labour productivity observed since the 1990s, no increase in the labour share was recorded
This study examines the impact of green transition and globalization processes on changes in the labour share
Very little attention has been paid to the consequences for labour share changes, which was the subject of interest for the authors of the study

Summary

Introduction

Despite the dynamic growth of labour productivity observed since the 1990s, no increase in the labour share was recorded The consequences of this phenomenon, unfavourable for income distribution in the economy, are being discussed in the context of economic policy, for employment policy [1]. The literature mentions many factors determining the share of work in the national income. Researchers define their impact in various ways and often focus their attention on a selected aspect such as openness of the economy, technological changes, and structural changes [2,3,4,5,6,7,8,9]. Due to the correlation between the phenomena, attention has been focused on globalization [21]

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