Estimating the Rate of Capital Share and Labor Share



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Estimating the Rate of Capital Share and Labor Share

The rate of capital share and of labor share at each time are to be estimated in the following way:

By making use of the method above, we can estimate and build the time-series data set of capital- and labor share rate:¦Á and ¦Â. The data of sales surplus(¦°), employees income(W) and nominal income(PY) from Annual Report on National Accounts (EPA, Japan) are used in this calculation.

Takenaka et al.(1989) estimated the capital share rate(¦Á) by estimating the Cobb-Douglas production function in manufacturing sector. If one use this method, one cannot help but accept that capital share rate remains unchanged over time. A glance at Table(6-1) below reveals that there is some fluctuations in capital share rate's movement from 1984 to 1993. Clearly, assuming the capital share rate to remain unchanged from 1984 to 1993 is not acceptable. So, capital share rate is calculated by using (5-2-1), instead of Takenaka et al.(1989)'s way.



next up previous contents
Next: Estimating Host Firms' Up: Methodology Previous: General Idea



Hidefumi Watanabe
Tue Apr 30 14:04:01 JST 1996