labor's share

Doug Henwood dhenwood at panix.com
Fri Aug 27 06:59:06 PDT 1999


[bourgeois categories of course]

"Measuring Labor's Share"

BY: ALAN B. KRUEGER

Princeton University

Department of Economics

National Bureau of Economic Research (NBER)

Paper ID: NBER Working Paper No. 7006

Date: March 1999

Contact: ALAN B. KRUEGER

Email: Mailto:akrueger at pucc.princeton.edu

Postal: Princeton University

Department of Economics

Princeton, NJ 08544-1021 USA

Phone: 609-258-4046

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ABSTRACT:

This paper considers conceptual and practical issues that arise

in measuring labor's share of national income. Most importantly:

How are workers defined? How is compensation defined? The

current definition of labor compensation used by the Bureau of

Economic Analysis (BEA) includes the salary of business owners

and payments to retired workers in labor compensation. An

alternative series to the BEA's standard series is presented. In

addition, a simple method for decomposing labor compensation

into a component due to "raw labor" and a component due to human

capital is presented. Raw labor's share of national income is

estimated using Census and CPS data. The share of national

income attributable to raw labor increased from 9.6 percent to

13 percent between 1939 and 1959, remained at 12-13 percent

between 1959 and 1979, and fell to 5 percent by 1996.

JEL Classification: J3



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