Over the past seventy years developed economies have experienced a rise and a fall in labor share. We present a novel explanation to explain these observed trends -- public enterprise employment. First, we document an empirical link between labor share and public enterprise employment in a...

The share of national income going to labour in New Zealand fell substantially between the 1970s and the end of the century. Approximately half of this decline was then recovered in the following decade. In this paper, we argue that the decline from the mid-1980s onwards is due to public sector...