Re-measuring labor's share
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.
|Date of creation:||01 May 2008|
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- Alan B. Krueger, 1999.
"Measuring Labor's Share,"
American Economic Review,
American Economic Association, vol. 89(2), pages 45-51, May.
- Katz, Lawrence F. & Autor, David H., 1999. "Changes in the wage structure and earnings inequality," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 26, pages 1463-1555 Elsevier.
- Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
- Alan B. Krueger, 1999. "Measuring Labor's Share," Working Papers 792, Princeton University, Department of Economics, Industrial Relations Section..
- Daron Acemoglu, 2000.
"Technical Change, Inequality, and the Labor Market,"
NBER Working Papers
7800, National Bureau of Economic Research, Inc.
- Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
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