Re-measuring labor's share

Andrew Young () and Hernando Zuleta

No 4674, Documentos de Trabajo from Universidad del Rosario

Abstract: Measuring labor's share of an economy's aggregate income seems straightforward,at least in principle. Count up wage and salary income, along with the value of benefitsprovided to employees, and divide it by total income. However, one fundamentalconcept of labor's share in macroeconomic theory is not the amount of aggregate incomepaid out to labor. Rather, it is the share of aggregate production that is attributable to"raw" units of labor. Or, otherwise stated, it is the share of aggregate income that wouldhave been paid to laborers if they had no accumulated stocks of human capital.1 Thisshare corresponds to an aggregate production function parameter: the elasticity of outputwith respect to physical (i.e. non-augmented or raw) units of labor (Robert Solow, 1957).In this paper we estimate annual raw labor´s share for the US, 1949 to 1996.

Keywords: Labor's Share; Factor Shares; Development; Biased Technical Change; Capital Intensity (search for similar items in EconPapers)
JEL-codes: O11 O30 O41 (search for similar items in EconPapers)
Pages: 19
Date: 2008-05-01
New Economics Papers: this item is included in nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:col:000092:004674

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