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The Real Income Shares of Labor, Human and Physical Capital: Determination Method and First Results for Germany

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  • Peter E.J. Steffen

    () (Universit├Ąt Hamburg (University of Hamburg))

Abstract

A method is presented that allows to separate the total labor income into parts of basic labor and human capital using annual micro data. As results yearly total income shares of physical and human capital and labor are obtained for a single country. The method is applied to Germany using micro data of the years 1976, 1985, 1995, and 2006. The obtained average income shares are in agreement with the well known results of Mankiw, Romer and Weil [8] if only employed workers are considered. If self-employed labor is also taken into account, the share ratios of physical and human capital and labor change to sK : sH : sL = 0:18 : 0:26 : 0:55. This result di ers considerably from the generally expected share ratios for developed countries of 1/3 : 1/3 : 1/3. Further on, the development of the German income shares are investigated. The observed variation is in contradiction to a constant behavior as expected from Kaldor's stylized facts. The source could be traced to considerable changes in the quali cation structure of the German work force.

Suggested Citation

  • Peter E.J. Steffen, 2013. "The Real Income Shares of Labor, Human and Physical Capital: Determination Method and First Results for Germany," Macroeconomics and Finance Series 201302, Hamburg University, Department Wirtschaft und Politik.
  • Handle: RePEc:hep:macppr:201302
    as

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    File URL: https://www.wiso.uni-hamburg.de/repec/hepdoc/macppr_2_2013.pdf
    File Function: First version, 2013
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    References listed on IDEAS

    as
    1. Jeong, Byeongju, 2002. "Measurement of human capital input across countries: a method based on the laborer's income," Journal of Development Economics, Elsevier, vol. 67(2), pages 333-349, April.
    2. Trinh Le & John Gibson & Les Oxley, 2003. "Cost- and Income-based Measures of Human Capital," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 271-307, July.
    3. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    4. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    5. Giuseppe Folloni & Giorgio Vittadini, 2010. "Human Capital Measurement: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 24(2), pages 248-279, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    human capital; Mikrozensus; annual factor income shares; factor share development;

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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