Greenaway-McGrevy, RyanBridgman, B2016-03-082016-02-1616 Feb 2016. Department of Economics Working Paper Series No. 284, University of Auckland, Aucklandhttp://hdl.handle.net/2292/28406The share of national income going to labour in New Zealand declined between the 1970s and the early 2000s. We argue that the majority of this decline can be attributed to institutional changes within the public market sector that began in the late 1980s. Corporatization (and in some cases privatization) re-orientated the enterprises away from a broad range of social and trading objectives towards generating profit for shareholders. The reforms thereby led to an increase in capital services and a corresponding decrease in the observed labour share in the public market sector. Using shift-share analysis we show that this decrease in the labour share of the public market sector accounts for the vast majority of the decline in economy-wide labour share. We also conjecture that a substantial proportion of the sharp increase in income inequality in New Zealand between the mid-1980s and the mid-1990s can be attributed to these institutional changes.Items in ResearchSpace are protected by copyright, with all rights reserved, unless otherwise indicated. Previously published items are made available in accordance with the copyright policy of the publisher.https://researchspace.auckland.ac.nz/docs/uoa-docs/rights.htmReportCopyright: University of Aucklandhttp://purl.org/eprint/accessRights/OpenAccess