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Factor Shares From Household Survey Data

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  • García Verdú Rodrigo

Abstract

This paper proposes a method for estimating the factor shares of labor and capital using cross sectional household survey data containing detailed information on household income by source. It then applies the method to the case of Mexico, a country where factor shares are almost the opposite of those in the United States. The application of this method using data from every available household survey that is representative at the national level, corresponding to the years 1968, 1977, 1984, 1989, 1992, 1994, 1996, 1998, 2000 and 2002, yields the following results: (i) factor shares in Mexico are much closer to those in the United States than the National Income and Product Accounts (NIPA) data suggest, with labor accounting for approximately 60% of income and capital for the other 40%; and (ii) factor shares in Mexico have been relatively constant over the time period analyzed. The paper then develops the implications of the differences between factor shares obtained from the NIPA data and the household survey data for some areas of economic research, including growth accounting and the analysis of the sources of growth.

Suggested Citation

  • García Verdú Rodrigo, 2005. "Factor Shares From Household Survey Data," Working Papers 2005-05, Banco de México.
    • Handle: RePEc:bdm:wpaper:2005-05
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7B1519FEF6-285D-23AC-3D5C-1F27A9B6BB6D%7D.pdf
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    Citations

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    Cited by:

    1. Enrique G. Mendoza, 2006. "Endogenous Sudden Stops in a Business Cycle Model with Collateral Constraints:A Fisherian Deflation of Tobin's Q," NBER Working Papers 12564, National Bureau of Economic Research, Inc.
    2. Douglas Gollin, 2008. "Labour's Share of Income," Department of Economics Working Papers 2008-19, Department of Economics, Williams College.
    3. Julio Cesar Leal Ordonez, 2014. "Tax collection, the informal sector, and productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(2), pages 262-286, April.
    4. Konstantinos Angelopoulos & George Economides & Vanghelis Vassilatos, 2011. "Do institutions matter for economic fluctuations? Weak property rights in a business cycle model for Mexico," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 511-531, July.
    5. Enrique G. Mendoza, 2008. "Sudden stops, financial crises and leverage: a Fisherian deflation of Tobin's Q," International Finance Discussion Papers 960, Board of Governors of the Federal Reserve System (U.S.).
    6. Carlos Alberto Zarazúa Juárez, 2021. "Macroprudential regulation as part of the Mexican policy toolkit," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(1), pages 1-27, Enero - M.
    7. Leal Ordóñez, Julio C., 2010. "Informal sector, productivity, and tax collection," MPRA Paper 26058, University Library of Munich, Germany, revised Oct 2010.
    8. Carlos Alberto Zarazúa Juárez, 2021. "Macroprudential regulation as part of the Mexican policy toolkit," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(1), pages 1-27, Enero - M.
    9. Andres Fernandez & Felipe Meza, 2015. "Informal Employment and Business Cycles in Emerging Economies: The Case of Mexico," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(2), pages 381-405, April.
    10. Enrique G. Mendoza, 2005. "Sudden Stops in an Equilibrium Business Cycle Model with Credit Constraints: A Fisherian Deflation of Tobin's Q," 2005 Meeting Papers 307, Society for Economic Dynamics.

    More about this item

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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