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Factor shares at the sector level, Colombia 1990-2005

Author

Listed:
  • Hernando Zuleta
  • Andrés Felipe García Suaza
  • Andrew Young

Abstract

In general, empirical studies on economics rely on the assumption of constant capitalshare of income both at the aggregate level and at the sector level. However, there is noempirical evidence supporting the constancy of capital share at the sector level. In thispaper, using Colombian data, we measure capital share for 48 sectors during the period1990-2005. We also explore the relation between capital's share and factor prices andthe behavior of capital share during the business cycle. The main results are thefollowing: (i) capital share is not constant but, rather, has an increasing trend; (ii) capitalshares growth rates positively correlate with sector value-added growth; (iii) the capitalshares behave pro-cyclically; and (iv) there is a positive correlation between capitalshares and real wages and a negative correlation between capital shares and interestrates. These results suggest that the usual assumption of constant factor shares is notaccurate.

Suggested Citation

  • Hernando Zuleta & Andrés Felipe García Suaza & Andrew Young, 2009. "Factor shares at the sector level, Colombia 1990-2005," Documentos de Trabajo 6120, Universidad del Rosario.
    • Handle: RePEc:col:000092:006120
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    File URL: http://repository.urosario.edu.co/bitstream/handle/10336/11012/6120.pdf
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    Cited by:

    1. Ricardo Argüello & Daniel Valderrama-Gonzalez, 2015. "Sectoral and poverty impacts of agricultural policy adjustments in Colombia," Agricultural Economics, International Association of Agricultural Economists, vol. 46(2), pages 259-280, March.

    More about this item

    Keywords

    Factor Shares; income distribution; cycles; economic growth; Colombia;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • 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
    • 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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