This paper explo­res the two-way rela­ti­onship betwe­en wor­kers’ invest­ment in kno­wled­ge capi­tal, fun­ded through inco­me-con­tin­gent loans, and func­ti­o­nal inco­me dis­tri­bu­ti­on within a demand-led macrody­na­mic fra­mework. Real wage growth is posi­ti­vely influ­en­ced by the employ­ment rate (whi­ch equals the uti­li­za­ti­on rate of kno­wled­ge capi­tal) and the growth of labor pro­duc­ti­vity (whi­ch equals the growth of kno­wled­ge capi­tal), and nega­ti­vely by the ratio of wor­kers’ debt to kno­wled­ge capi­tal. In the short-run equi­li­brium, the level of eco­no­mic acti­vity is posi­ti­vely influ­en­ced by the labor sha­re of inco­me. In the uni­que long-run equilibrium—which is sta­ble as long as the res­pon­se of real wage growth to the wor­kers’ debt ratio is not too strong—parameter chan­ges that boost aggre­ga­te demand or strengthen wor­kers’ bar­gai­ning power in wage nego­ti­a­ti­ons (with the excep­ti­on of the para­me­ter medi­a­ting the posi­ti­ve effect of the expec­ted real wage inco­me on invest­ment in kno­wled­ge capi­tal) result in a higher labor sha­re and a lower wor­kers’ debt ratio. Whi­le gre­a­ter invest­ment in kno­wled­ge capi­tal rai­ses the level of eco­no­mic acti­vity in the short-run equi­li­brium, it may not have the same effect—and may fail to incre­a­se the labor share—in the long-run equilibrium.