This paper presents direct measures of capital costs, equal to the product of the required
rate of return on capital and the value of the capital stock. The capital share, equal to the
ratio of capital costs and gross value added, does not offset the decline in the labor share.
Instead, a large increase in the share of pure profits offsets declines in the shares of both
labor and capital. Industry data show that increases in concentration are associated with
declines in the labor share.

This paper shows that the decline in the labor share over the last 30 years was not offset by
an increase in the capital share. I calculate payments to capital as the product of the
required rate of return on capital and the value of the capital stock. I document a large
decline in the capital share and a large increase in the profit share in the US non-financial
corporate sector over the last 30 years. I show that the decline in the capital share is robust
to many calculations of the required rate of return and is unlikely to be driven by unobserved …