The Evolution of Factor Shares: Evidence from Switzerland

Guido Baldi and Martina Pons

MPRA Paper from University Library of Munich, Germany

Abstract: While the labor share of income has decreased in most advanced economies since the 1980s, it has remained relatively stable in Switzerland. However, this does not imply that the capital share of income has also remained stable. Our results suggest that the share of imputed capital rental payments to income has decreased. Similar to other countries, Switzerland has seen an increase in the so-called factorless income share that cannot be readily attributed to capital and labor. The increase in factorless income may reflect a rise in economic rents, higher compensation for business risks, or increased compensation for unmeasured input factors, especially intangible capital. We find that the stable labor share in Switzerland cannot be traced back to high wage growth, but rather to subdued investment growth and a high growth rate of the labor force.

Keywords: Labor Share; Capital Share; Factorless Income; Return to Capital. (search for similar items in EconPapers)
JEL-codes: E01 E22 E23 E25 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-mac
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Related works:
Working Paper: The Evolution of Factor Shares: Evidence from Switzerland (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:92408

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