Declining labor shares and the relative price of investment: evidence from state investment tax credits

Project Summary:

This research will explore the changing distribution of income between labor and capital. The project will look specifically at how tax policy focused towards investment may be responsible for the shift of income from labor to capital by looking at differences across states. The shift in the capital-labor distribution is critically important for understanding not just economic inequality, but growth as well.


Owen Zidar is an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at the National Bureau of Economic Research.

Zidar studies the effects of tax policy on the outcomes of firms and workers and on the location and scale of economic activity. His research analyzes the effect of taxes on firm and worker location decisions, the incidence and efficiency costs of corporate taxation, the economic impacts of taxing high-income earners, investment tax policy, and the impact of state taxes on the U.S. economy.

In addition to his research and academic writings, he has written for The Washington Post, Wonkblog, and The New York Times Economix blog. Before joining Chicago Booth, Zidar worked as a staff economist at the Council of Economic Advisers and as an analyst at Bain Capital Ventures.

Zidar holds a Ph.D. in economics from the University of California, Berkeley. His pre-doctoral studies were at Dartmouth College where he earned a B.A., summa cum laude, in economics (high honors).