IESET.
Hypotheses·distribution·labour_share_decline_capital_mobility_panel

Across an OECD post-1980 panel, the rise in cross-border capital-account openness is the dominant treatment channel reducing the labour share of gross value added, with a magnitude that exceeds the contributions of technology, trade, or measurement adjustments.

A one-standard-deviation rise in capital-account openness is associated with at least a 2 percentage-point fall in the labour share over a five-year horizon, conditional on union density and the standard control set; the effect survives instrumenting openness with global financial-liberalisation waves.

PARTIALengine/runs/labour_share_decline_capital_mobility_panel

PARTIAL — coef=+1377, p=0.418 (above α=0.1); direction inconclusive

confidence cueThe result is useful, but not decisive. Treat it as a clue, not a settled conclusion.

policy briefMixed or noisy

In ordinary language

When countries open more of the economy to trade and competition, do people end up with better long-run income or productivity outcomes?

plain answer

The evidence is suggestive but not decisive. coef=+1377, p=0.418 (above α=0.1); direction inconclusive

why it matters

Distributional claims often sound morally clear but are empirically complex. This test asks whether the proposed channel explains real differences across places.

how the test works

It compares 22 country or place units from 1980 to 2020, using a panel fe design, with fixed effects for country and year.

what was measured
What changed
  • Capital account openness
  • Union density
What we checked
  • Labour share gross value added
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

No evidence packet has been generated yet.

Results

engine/runs/labour_share_decline_capital_mobility_panel
1007550250198020002020USAGBRFRADEUITAESPNLD
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show labour_share_gross_value_added across 22 sampled countries over 1980–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for labour_share_decline_capital_mobility_panel. Published chart will be generated from engine/runs/labour_share_decline_capital_mobility_panel/chart_data.json.

Pre-registration

registration ordering unverified
first-spec commit 4c8ce8e · 2026-07-18T22:11:21Z
run generated · 2026-06-29T17:49:16Z
Run timestamp predates this path's first git-add commit (rebase, rename, or pre-git local run). Spec hash is still the path's first-add commit — not repository HEAD — but ordering is not a clean pre-registration proof.

Across an OECD post-1980 panel, the rise in cross-border capital-account openness is the dominant treatment channel reducing the labour share of gross value added, with a magnitude that exceeds the contributions of technology, trade, or measurement adjustments. A one-standard-deviation rise in capital-account openness is associated with at least a 2 percentage-point fall in the labour share over a five-year horizon, conditional on union density and the standard control set; the effect survives instrumenting openness with global financial-liberalisation waves.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

Not supported if the coefficient on capital-account openness is positive or smaller in absolute value than 1 percentage point per one-standard-deviation rise (p < 0.10), or if the union-density interaction is the wrong sign — i.e. high-union countries show bigger labour-share falls under openness than low-union countries. A symmetric falsification: the coefficient on capital-deepening (log K/L) is materially larger than the openness coefficient, which would re-vindicate the technology-is-dominant reading.

formal test & threshold
test:      panel_fe_coefficient_on_capital_account_openness_with_union_density_interaction
threshold: coef(capital_account_openness) <= -0.4 percentage-points per unit KAOPEN AND |coef(KAOPEN)| > |coef(log K/L)|  AND  p(KAOPEN) < 0.10

Method

Template
panel_fe
Fixed effects
country, year
Clustering
country
Sample
22 countries · 1980 – 2020
Evidence type
associational

OECD panel (1980-2020) regressing labour share on capital-account openness and union density with country and year FE; Driscoll-Kraay SEs clustered by country. Five-year forward differences as robustness. A v2 IV specification instruments KAOPEN with the global mean-of- other-countries openness wave (a la Rajan-Zingales).

Data

VariableSourceTransform
labour_share_gross_value_added
outcome
oecd:OECD.SDD.NADtier 2
level
capital_account_openness
treatment
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
union_density
treatment
oecd:OECD.ELS.SAEtier 2
level
gdp_per_capita_ppp
control
world_bank_wdi:NY.GDP.PCAP.PP.KDtier 2
log
trade_openness
control
world_bank_wdi:NE.TRD.GNFS.ZStier 2
level
log_population
control
world_bank_wdi:SP.POP.TOTLtier 2
log
capital_stock_per_worker_proxy
control
pwt:rknatier 3
log
import_penetration_manufactures
control
world_bank_wdi:TM.VAL.MANF.ZS.UNtier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — labour_share_decline_capital_mobility_panel

Verdict: PARTIAL — coef=+1377, p=0.418 (above α=0.1); direction inconclusive

Pre-registration

  • Claim: Across an OECD post-1980 panel, the rise in cross-border capital-account openness is the dominant treatment channel reducing the labour share of gross value added, with a magnitude that exceeds the contributions of technology, trade, or measurement adjustments. A one-standard-deviation rise in capital-account openness is associated with at least a 2 percentage-point fall in the labour share over a five-year horizon, conditional on union density and the standard control set; the effect survives instrumenting openness with global financial-liberalisation waves.
  • Falsification rule: Not supported if the coefficient on capital-account openness is positive or smaller in absolute value than 1 percentage point per one-standard-deviation rise (p < 0.10), or if the union-density interaction is the wrong sign — i.e. high-union countries show bigger labour-share falls under openness than low-union countries. A symmetric falsification: the coefficient on capital-deepening (log K/L) is materially larger than the openness coefficient, which would re-vindicate the technology-is-dominant reading.
  • Falsification test: panel_fe_coefficient_on_capital_account_openness_with_union_density_interaction

Estimate

  • Method: statsmodels OLS FE fallback (linearmodels failed: exog does not have full column rank. If you wish to proceed with model estimation irrespective of the numerical accuracy of coefficient estimates, you can set check_rank=False.)
  • Coefficient (treatment): +1377
  • Std error: 1700
  • p-value: 0.418
  • Observations: 449, countries: 17
  • Within R²: 0.964
  • Fixed effects: entity=True, time=True
  • Clustering: country

Variables resolved

  • oecd:OECD.SDD.NAD,DSD_NAMAIN1@DF_TABLE1,1.0 → labour_share_gross_value_added (outcome, publisher=oecd, n=3157)
  • world_bank_wdi:NE.TRD.GNFS.ZS → capital_account_openness (treatment, publisher=world_bank_wdi, n=10714)
  • oecd:OECD.ELS.SAE,DSD_TUD_CBC@DF_TUD,1.0 → union_density (treatment, publisher=oecd, n=1825)
  • world_bank_wdi:NY.GDP.PCAP.PP.KD → gdp_per_capita_ppp (controls, publisher=world_bank_wdi, n=8325)
  • world_bank_wdi:NE.TRD.GNFS.ZS → trade_openness (controls, publisher=world_bank_wdi, n=10714)
  • world_bank_wdi:SP.POP.TOTL → log_population (controls, publisher=world_bank_wdi, n=14447)
  • pwt:rkna → capital_stock_per_worker_proxy (controls, publisher=pwt, n=7095)
  • world_bank_wdi:TM.VAL.MANF.ZS.UN → import_penetration_manufactures (controls, publisher=world_bank_wdi, n=9822)

Generated by scripts/run_panel_fe.py at 2026-06-29T17:49:16+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

Candidate, not pre_registered. On promotion, tighten threshold language with point estimates and pin the OECD union-density dataflow URN.

Authored framework. Read the transparency note.