The distribution of primary income between labour and capital: new trends in the world economy

Abstract

This paper examines changes in the structure of GDP by types of primary income in many countries of the world with different levels of technical, economic and social development over a long period. Particular attention is paid to the analysis of the dynamics of the share of wages in GDP. It is shown that the widespread idea about the long-term stability of this share is no more realistic. A steady trend towards a decrease in the share of wages in favour of an increase in the share of profits in GDP is observed both in the economically advanced and in many developing countries. The trend has been noticeable in recent decades in the context of digitalization, robotization, and the introduction of lights-out production. The author scrutinizes the ways by which automation and digitalization of the economy influence the shift in the structure of GDP by types of primary income which decreases the share of employees’ earnings, and increases the capital owners’ share of income.