Marx-Biased Technical Change and Income Distribution: A Panel Data Analysis

Abstract

This paper provides a further empirical evaluation of the Neoclassical theory of distribution as opposed to Marx-biased technical change (MBTC) by applying the theoretical and empirical framework developed by Foley and Michl (1999), Michl (1999, 2009) and Basu (2010) to a panel of countries. Basu (2010) developed a test based on cross-sectional data: we argue that a panel data analysis is instrumental in increasing the efficiency and validity of the test. Our results generalize Basu’s findings in providing support for MBTC and against the Neoclassical theory of income distribution.