Abstract: The U.S. aggregate labour share of income has declined significantly since the mid-1980s. The prevailing view in the literature attributes the decline to common, within-sector decreases in labour shares, thereby downplaying the contribution of sectoral reallocation. Using a new decomposition method, I show i) the long-term decline is overwhelmingly driven by sectors whose labour shares fell as they grew in size, ii) reallocation toward high-labour-share sectors would have offset nearly half of the total decrease, an order of magnitude more than previously found; iii) the within-sector effect is only half as large as other studies conclude, no larger than normal fluctuations over the business cycle.

Abstract: We study how corporate tax reforms affect the distribution of resources across firms. Motivated by a Dutch fiscal reform, we use a heterogeneous firm model to test whether a lower tax rate coupled with reduced investment deductibility improves allocative efficiency. We find that aggregate productivity increases and capital misallocation declines, driven by the reallocation of capital from medium-large firms to the largest and most productive. The tax cut disproportionately benefits top firms, enabling their expansion, while the deductibility reduction burdens medium-large firms that invest more intensively than others. 

Abstract: This paper utilises employer-employee data from the Netherlands to study the role firms play in contributing to the wage penalty faced by temporary contract workers. We estimate firm-by-contract-specific wage premia and decompose the firm-related component of the wage penalty into sorting and bargaining effects. Temporary workers earn 8% less per hour than permanent workers due to firms. Of the firm component, over two-thirds arises because temporary workers are underrepresented in high-paying firms (sorting), and the remainder stems from lower wages at the same firm (bargaining). We hypothesise that monopsony power and the complementarity between wage and non-wage amenities explain part of the sorting pattern we observe.