Using industry-level data, a recent study6 analyzed labors share of income, measured as total compensation divided by

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Using industry-level data, a recent study6 analyzed labor’s share of income, measured as total compensation divided by total compensation plus the gross operating surplus. The authors predicted this would decrease as the degree of financialization of the company increased. Financialization was measured as the ratio of financial receipts

(e.g., interest, dividends, capital gains) to business receipts from selling goods and services. The authors used regression analyses. The prediction equation reported for data from 1999 to 2008 for all nonfinance industries sampled was yˆ = αˆ − 0.882 f − 0.906u − 0.727ci − 0.367c + 0.880wm

+0.052ic + 8.697es + 0.850cc − 0.207ecr, where f = financialization, u = percentage of workforce in unions, ci = a measure of computer investment, c =

proportion of workers who are college graduates, wm =

proportion of workers who were non-Hispanic white men, ic = industrial concentration, es = employment size, cc =

capital consumption, and ecr = error correction rate. The se for financialization was 0.070.

The authors stated, “the model estimates support our hypothesis.” Explain how the results stated here support this conclusion.

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