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Re-measuring labor's share

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  • Andrew T. Young

    ()

  • Hernando Zuleta

    ()

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.

Suggested Citation

  • Andrew T. Young & Hernando Zuleta, 2008. "Re-measuring labor's share," DOCUMENTOS DE TRABAJO 004674, UNIVERSIDAD DEL ROSARIO.
  • Handle: RePEc:col:000092:004674
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    References listed on IDEAS

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    1. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    2. Alan Krueger, 1999. "Measuring Labor's Share," Working Papers 792, Princeton University, Department of Economics, Industrial Relations Section..
    3. Alan B. Krueger, 1999. "Measuring Labor's Share," American Economic Review, American Economic Association, vol. 89(2), pages 45-51, May.
    4. 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.
    5. repec:fth:prinin:413 is not listed on IDEAS
    6. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
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    Cited by:

    1. Young, Andrew T. & Lawson, Robert A., 2014. "Capitalism and labor shares: A cross-country panel study," European Journal of Political Economy, Elsevier, vol. 33(C), pages 20-36.
    2. Luciano BOGGIO & Vincenzo DALL’AGLIO & Marco MAGNANI, 2010. "On Labour Shares in Recent Decades: A Survey," Rivista Internazionale di Scienze Sociali, Vita e Pensiero, Pubblicazioni dell'Universita' Cattolica del Sacro Cuore, vol. 118(3), pages 283-333.

    More about this item

    Keywords

    Labor's Share; Factor Shares; Development; Biased Technical Change; Capital Intensity;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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