Shaping the Corporate Management Culture
How do management values and corporate culture contribute to the decline in labor's share of national income? This project aims to empirically analyze this question.
Income inequality in developed countries has significantly increased over the past four decades. In the United States, for example, the top 1% controlled 10% of the income in 1980, rising to 21% by 2023. Meanwhile, several industrialized countries experienced a decline in the labor share of national income. The literature has suggested various factors, which can explain this widening inequality and diminishing labor share. These explanations include international trade, technological progress and automation, and increasing market power.
In this project, we analyze the role of corporate management culture in explaining wage inequality. Specifically, we study how corporate management culture is propagated and how it affects key firm decisions, including worker wages. For instance, business schools can have contributed to the spread of management philosophies such as the Friedman doctrine, which advocates that a business's social responsibility is to increase its profits, and LEAN, which focuses on cutting unnecessary costs (though not specifically wages).
Studying the effects of corporate management culture seems particularly important as we enter a new era where artificial intelligence (AI) may fundamentally change the labor market. AI has the potential to increase the productivity across a wide range of jobs as well as lead to displacement of workers. Understanding how management philosophies influence decisions about wage structures and workforce management becomes crucial when facing disruptive technological progress like AI.
In this research project, we use a combination of administrative register data and survey data to empirically investigate how management philosophy is propagated and its impact on the distribution of profits between shareholders and workers. This research project contributes to a broader research agenda that examines the role of key actors and norms in explaining recent macroeconomic trends.
Researchers
| Name | Title | Job responsibilities | Image |
|---|---|---|---|
| Search in Name | Search in Title | Search in Job responsibilities | |
| Daniel le Maire | Associate Professor | Labor Economics; Search Theory; Applied Microeconometrics |
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