Functional Income Reditribution revisited by trade union foundation

Intresting study about income redistribution. It shows also that the facts on which the IMF or the EC bases their policies could be challenged. So, one field of our resistance is already the administrative research.

"Wage shares have fallen substantially over the past 25 years. In the Euro area the (adjusted)
wage share declined by almost ten percentage points. Recently, there has been a renewed
interest in the determinants of functional income distribution. IMF (2007a) and EC (2007)
find that technological change has been the main cause of the decline in the wage share and
that globalization has been a secondary cause. This study, firstly, tries to replicate these
studies to investigate the robustness of their findings. Secondly, the estimated wage share
equation is extended to allow for distributional effects of financial globalization and for
different effects of union density according to social security system. We find that the
estimations on which the conclusions of IMF and EC are based suffer from serious
econometric problems and that their findings are not robust. In particular, the effect of
technological change is often not statistically significant. Globalization (in production),
however, has a robust effect. Results from the extended model suggest economically
important (and mostly statistically significant) effects of financial globalization and of union
density of non-Ghent countries. However, overall the results are sensitive to the specification
and the estimation method."  Prof. Dr. Engelbert Stockhammer