IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-2015-041.html
   My bibliography  Save this paper

Measuring the Labour Income Share of Developing Countries: Learning from Social Accounting Matrices

Author

Listed:
  • Katharina Trapp

Abstract

This paper is the first to address the challenges of measuring the labour income share of developing countries. The poor availability and reliability of national accounts data, and the fact that self-employed people, whose labour income is hard to capture, account for a major share of the workforce and often work in the informal sector, render its computation difficult. I consult social accounting matrices as an additional source of information to construct a labour share dataset backed up with microeconomic evidence.

Suggested Citation

  • Katharina Trapp, 2015. "Measuring the Labour Income Share of Developing Countries: Learning from Social Accounting Matrices," WIDER Working Paper Series wp-2015-041, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2015-041
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/wp2015-041.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rembert De Blander & Geert Dhaene, 2012. "Unit root tests for panel data with AR(1) errors and small T," Econometrics Journal, Royal Economic Society, vol. 15(1), pages 101-124, February.
    2. Arief Anshory Yusuf, 2006. "Constructing Indonesian Social Accounting Matrix for Distributional Analysis in the CGE Modelling Framework," Working Papers in Economics and Development Studies (WoPEDS) 200604, Department of Economics, Padjadjaran University, revised Nov 2006.
    3. Ivanic, Maros, 2004. "Reconciliation of the GTAP and Household Survey Data," GTAP Research Memoranda 1408, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    4. A. B. Atkinson, 2009. "Factor shares: the principal problem of political economy?," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 25(1), pages 3-16, Spring.
    5. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    6. Slaughter, Matthew J., 2001. "International trade and labor-demand elasticities," Journal of International Economics, Elsevier, vol. 54(1), pages 27-56, June.
    7. World Bank, 2013. "World Development Report 2014 [Informe sobre el desarrollo mundial 2014, Riesgo y oportunidad : la administración del riesgo como instrumento de desarrollo - Panorama general]," World Bank Publications - Books, The World Bank Group, number 16092, December.
    8. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    9. Niño-Zarazúa, Miguel & Roope, Laurence & Tarp, Finn, 2014. "Global interpersonal inequality Trends and measurement," MPRA Paper 52881, University Library of Munich, Germany.
    10. Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001. "Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 47-64.
    11. Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
    12. Luci Ellis & Kathryn Smith, 2010. "The Global Upward Trend in the Profit Share," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(3), pages 231-256.
    13. Mead, Donald C. & Liedholm, Carl, 1998. "The dynamics of micro and small enterprises in developing countries," World Development, Elsevier, vol. 26(1), pages 61-74, January.
    14. Maddala, G S & Wu, Shaowen, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-652, Special I.
    15. Ms. Anastasia Guscina, 2006. "Effects of Globalization on Labor’s Share in National Income," IMF Working Papers 2006/294, International Monetary Fund.
    16. John Hutchinson & Damiaan Persyn, 2012. "Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 148(1), pages 17-43, April.
    17. Arjun Jayadev, 2007. "Capital account openness and the labour share of income," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(3), pages 423-443, May.
    18. Guerriero, Marta & Sen, Kunal, 2012. "What Determines the Share of Labour in National Income? A Cross-Country Analysis," IZA Discussion Papers 6643, Institute of Labor Economics (IZA).
    19. Douglas, Paul H, 1976. "The Cobb-Douglas Production Function Once Again: Its History, Its Testing, and Some New Empirical Values," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 903-915, October.
    20. Ben S. Bernanke & Refet S. Gürkaynak, 2002. "Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously," NBER Chapters, in: NBER Macroeconomics Annual 2001, Volume 16, pages 11-72, National Bureau of Economic Research, Inc.
    21. Ms. Florence Jaumotte & Ms. Irina Tytell, 2007. "How Has The Globalization of Labor Affected the Labor Income Share in Advanced Countries?," IMF Working Papers 2007/298, International Monetary Fund.
    22. Fox, Louise & Sohnesen , Thomas Pave, 2012. "Household enterprises in Sub-Saharan Africa : why they matter for growth, jobs, and livelihoods," Policy Research Working Paper Series 6184, The World Bank.
    23. Niño-Zarazúa, Miguel & Roope, Laurence & Tarp, Finn, 2014. "Global interpersonal inequality Trends and measurement," MPRA Paper 52881, University Library of Munich, Germany.
    24. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Maarek & Elsa Orgiazzi, 2020. "Development and the Labor Share," The World Bank Economic Review, World Bank, vol. 34(1), pages 232-257.
    2. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).
    3. Bengtsson, Erik & Waldenström, Daniel, 2018. "Capital Shares and Income Inequality: Evidence from the Long Run," The Journal of Economic History, Cambridge University Press, vol. 78(3), pages 712-743, September.
    4. Barker, Tom & Üngör, Murat, 2019. "Vietnam: The next asian Tiger?," The North American Journal of Economics and Finance, Elsevier, vol. 47(C), pages 96-118.
    5. Malte Luebker, 2017. "Poverty, employment and inequality in the SDGs: heterodox discourse, orthodox policies?," Chapters, in: Peter A.G. van Bergeijk & Rolph van der Hoeven (ed.), Sustainable Development Goals and Income Inequality, chapter 8, pages 141-168, Edward Elgar Publishing.
    6. Bruno Carballa Smichowski & Cédric Durand & Steven Knauss, 2016. "Uneven development patterns in global value chains," CEPN Working Papers hal-01368948, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katharina Trapp, 2015. "Measuring the labour income share of developing countries: Learning from social accounting matrices," WIDER Working Paper Series 041, World Institute for Development Economic Research (UNU-WIDER).
    2. Katharina van Treeck, 2020. "Measuring the Labor Income Share of Developing Countries: Lessons From Social Accounting Matrices," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(3), pages 584-612, September.
    3. Katharina van Treeck & Konstantin M. Wacker, 2020. "Financial globalisation and the labour share in developing countries: The type of capital matters," The World Economy, Wiley Blackwell, vol. 43(9), pages 2343-2374, September.
    4. Guerriero, Marta & Sen, Kunal, 2012. "What Determines the Share of Labour in National Income? A Cross-Country Analysis," IZA Discussion Papers 6643, Institute of Labor Economics (IZA).
    5. Ivan D. Trofimov, 2019. "Stability of Labour Shares: Evidence from OECD Economies," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 17(1), pages 57-89.
    6. Doan, Ha Thi Thanh & Wan, Guanghua, 2017. "Globalization and the Labor Share in National Income," ADBI Working Papers 639, Asian Development Bank Institute.
    7. Saumik Paul & Yoko Oishi, 2018. "A Primer on the Drivers of Labor Income Share," Working Papers id:12948, eSocialSciences.
    8. Kyoji Fukao & Cristiano Perugini, 2021. "The Long‐Run Dynamics of the Labor Share in Japan," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 445-480, June.
    9. repec:pra:mprapa:43050 is not listed on IDEAS
    10. Marta Guerriero, 2019. "The Labor Share of Income Around the World: Evidence from a Panel Dataset," ADB Institute Series on Development Economics, in: Gary Fields & Saumik Paul (ed.), Labor Income Share in Asia, chapter 0, pages 39-79, Springer.
    11. Sekine, Toshitaka, 2009. "Another look at global disinflation," Journal of the Japanese and International Economies, Elsevier, vol. 23(2), pages 220-239, June.
    12. Zhi Luo & Guanghua Wan & Chen Wang & Xun Zhang, 2022. "The distributive impacts of the Belt and Road Initiative," Journal of Economic Surveys, Wiley Blackwell, vol. 36(3), pages 586-604, July.
    13. Federico Riccio & Lorenzo Cresti & Maria Enrica Virgillito, 2022. "The labour share along global value chains. Perspectives and evidence from sectoral interdependence," LEM Papers Series 2022/11, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    14. Paul, Saumik & Thomas, Liam, 2020. "The Agricultural Productivity Gap and Self-Employment Bias in the Labor Income Share," IZA Discussion Papers 13415, Institute of Labor Economics (IZA).
    15. Alexei Izyumov & John Vahaly, 2015. "Income Shares Revisited," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(1), pages 179-188, March.
    16. Young, Andrew T. & Tackett, Maria Y., 2018. "Globalization and the decline in labor shares: Exploring the relationship beyond trade and financial flows," European Journal of Political Economy, Elsevier, vol. 52(C), pages 18-35.
    17. Herzer, Dierk, 2014. "Unions and income inequality: a heterogenous cointegration and causality analysis," Working Paper 146/2014, Helmut Schmidt University, Hamburg.
    18. Sheida Teimouri, 2015. "Currency crises and dynamics of real wages," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(2), pages 377-403, May.
    19. Mirella Damiani & Fabrizio Pompei & Andrea Ricci, 2012. "Labour Shares and Employment Protection in European Economies," Quaderni del Dipartimento di Economia, Finanza e Statistica 111/2012, Università di Perugia, Dipartimento Economia.
    20. Jagannath Mallick, 2020. "Does Global Economic Integration affect Labour Income Share in India?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 291-309, June.
    21. Ahsan, Reshad N. & Mitra, Devashish, 2014. "Trade liberalization and labor's slice of the pie: Evidence from Indian firms," Journal of Development Economics, Elsevier, vol. 108(C), pages 1-16.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:wp-2015-041. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.