Remeasuring Labour's Share

Andrew Young, Hernando Zuleta

Research output: Contribution to journalArticlepeer-review

Abstract

Alan Krueger (1999) provides a measure of"raw" labor's share for the US postwar economy based on Mincerian regressions using Census data on individual earnings, schooling, and work experience. He finds that raw labor's share fell by over 8 percent from 1959 through 1996 to under 5 percent of national income. We provide an alternative approach to calculating raw labor's share (1949 to 1996) using direct observations on the wage rates of uneducated and inexperienced workers. Given the composition of the American labor force, the most uneducated workers are those with 8 years of education or less; aged 16 to 18 years. We assume that the market treat these workers as if they have no human capital. Our baseline measure of raw labor's share is considerably higher than that reported by Krueger with a high of nearly 30.9 percent in 1949 and a low of 12.4 percent in 1974. Furthermore, unlike the Krueger measure which falls from 1979 onward, our measure rises during the later part of the sample
Original languageEnglish
JournalApplied Economics Letters
StatePublished - Apr 2013

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