- 3. Estimating user-costs following Hall and Jorgenson (1967) (User-cost R*Ktot). Alternatively, we can impose more structure on the problem, and estimate RH following the now standard formula of Hall and Jorgenson (1967): RHJ = rf + H ge pH (5) where rf denotes the risk-free rate, ge pH the expected growth in the price of housing and H the depreciation of housing. We set rf equal to the 10-year centered moving average of the country-specic risk-free rate. 32 We set H = 0:0114, which is the assumed depreciation rate of housing structures in EU KLEMS. Last, we estimate ge pH as the 10-year centered moving average 32 Using a moving average accounts for the fact that housing assets are often purchased through long maturity mortgages, hence the appropriate rate would be a rolling average of spot rates. The moving average also tracks the actual cost of debt of non-nancial corporations far more closely than the spot rate.
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- B. Additional Details and Results We rst present a set of additional results: Figure A.2 plots historical labor share series for EU4 countries as well as the United States since 1950.
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- Corporate sector labor shares. The labor share for the corporate sector is dened as the ratio of employee compensations to GVA in the corresponding sector. We use OECD data and Karabarbounis and Neiman (2014) to extend our series back in time. Most of our results use the raw corporate sector labor shares. However, Figure 3 of the paper corrects for housing services and labor compensation of the self-employed. See the main text for additional details.
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- Figure A.14 Share of the real estate sector in total GVA, Europe and United States, 1970-2015, in % 4 6 8 10 12 1970 1990 2010 EU14 EU27 EU4 US Source: authors' calculations using EU KLEMS. Real estate activities is sector L in ISIC rev. 4. EU14 includes France, Italy, Germany, the UK as well as Austria, Belgium, Denmark, Greece, Spain, Finland, Luxembourg, the Netherlands, Portugal and Sweden. EU27 includes all EU countries except Malta.
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- Figure A.17 Gross labor share for France with alternate self-employment adjustments, in % 60 65 70 75 80 1950 1970 1990 2010 FR Unadjusted business sector (INSEE) Unadjusted business sector (KLEMS) Adjusted business sector (using hours worked by self-emp., KLEMS) Adjusted business sector (using mixed income, INSEE) Adjusted corporate sector Source: authors' calculations using OECD, KLEMS, and INSEE. All series are adjusted for real estate (see main text for more details); they are adjusted for self-employment only when specied.
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- Figure A.23 Housing share of corporate gross value added for France .015 .02 .025 .03 .035 1970 1980 1990 2000 2010 2020 year Rents ex HH/Kstruc HH Y/Kstruc Rent-to-Price*Ktot Figure A.24 Raw and corrected labor shares for France (change from 1979) -.15 -.1 -.05 0 .05 1980 1990 2000 2010 year HH Y/Kstruc Rents ex HH/Kstruc Rent-to-Price*Ktot CB KLEMS NFME ex RE Figure A.25 Corporate share of dwellings, by country, 2015 0 .1 .2 .3 .4 NFC Share of Dwellings (2014) G R C L T U H U N U S A N O R P R T E S T L U X P O L K O R S V N L V A I T A B E L S V K C A N C Z E G B R D E U J P N F I N A U T F R A N L D D N K S W E
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- Figure A.3 contrasts estimated trends using the harmonized series against those of Karabarbounis and Neiman (2014), for countries and years available in both datasets. The harmonized series signicantly reduces the fall in the labor share on average.
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- Figure A.5 Labor share, comparison EU KLEMS and CompNet, manufacturing sector, 2001-2012, in % 50 60 70 80 50 60 70 80 2001 2003 2005 2007 2009 2011 2001 2003 2005 2007 2009 2011 All countries DE FR IT EU KLEMS, labor share CompNet, wage share Source: authors' calculations using EU KLEMS and CompNet. The gures shows the average wage share over sub-sectors of the manufacturing sector where the value is reported in both datasets. Averages are weighted by the share in GVA of the sub-sector in EU KLEMS.
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- Figure A.8 Domestic gross labor share at market and basic prices, total economy, Europe and United States, 1950-2015, in % 40 50 60 70 40 50 60 70 1950 1970 1990 2010 1950 1970 1990 2010 1950 1970 1990 2010 DE EU14 FR IT UK US Basic prices Market prices Source: authors' calculation using OECD.
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- Finally, we use Eurostat, world KLEMS and OECD STAN to build series for non European countries (see Table A.4). Our dataset covers up to 39 countries from up to 1961-2017.
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- More specically, the labor share for the total economy is: (WL + MI[WL=(Y MI)])=Y . Piketty and Zucman (2014) simply apply the corporate wage share to the noncorporate GVA, without using the information on mixed income nor employee compensations in this sector.
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- Note: Share of total labor compensations in GVA. Series are adjusted for self-employed (see Appendix section A for a description of the adjustment). Corporate sector net shares are measured using information on the consumption of xed capital. Business sector net shares are measured using KLEMS estimates of capital depreciation at the industry-asset level. EU4 includes France, Italy, Germany and the UK and plots the year xed eects from a regression of labor shares that also includes country xed eects, to account for entry and exit during the sample. The regressions are weighted by GDP measured in US dollars at market exchange rates. The eects have been normalized to equal to the average labor share in 1995.
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- Note: Share of total labor compensations in GVA. Series are adjusted for self-employed (see Appendix section A for a description of the adjustment). EU14 includes France, Italy, Germany, the UK as well as Austria, Belgium, Denmark, Greece, Spain, Finland, Luxembourg, the Netherlands, Portugal and Sweden. It plots the year xed eects from a regression of labor shares that also includes country xed eects, to account for entry and exit during the sample. The regressions are weighted by GDP measured in US dollars at market exchange rates. The eects have been normalized to equal to the average labor share in 1995.
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- Note: Share of total labor compensations in GVA. Series are adjusted for self-employed (see Appendix section A for a description of the adjustment). EU4 includes France, Italy, Germany and the UK and plots the year xed eects from a regression of labor shares that also includes country xed eects, to account for entry and exit during the sample. The regressions are weighted by GDP measured in US dollars at market exchange rates. The eects have been normalized to equal to the average labor share in 1995.
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- of housing price changes, as measured by the OECD's house price indices. Importantly, KH under Hall and Jorgenson (1967) should include land as well as structures. The data includes the value of residential and non residential structures, as well as (total) land. We assume the value of land splits between residential and non residential assets according to the share of residential and non residential structures.
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- Series for Europe plot the year xed eects from a regression of shares that also includes country xed eects, to account for entry and exit during the sample. The regressions are weighted by GDP measured in US dollars at market exchange rates. The eects have been normalized to equal to the average share in 1995.
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- Smith, M., Yagan, D., Zidar, O. M., and Zwick, E. (2019). Capitalists in the twenty-rst century. Working Paper 25442, National Bureau of Economic Research.
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- Source: authors' calculations using EU KLEMS, OECD, Piketty and Zucman (2014) and Karabarbounis and Neiman (2014). EU4 plots the year xed eects from a regression of labor shares that also includes country xed eects, to account for entry and exit during the sample. The regressions are weighted by GDP measured in US dollars at market exchange rates and the eects have been normalized to equal the average labor share in 1995.
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- Table A.4 Coverage of nal dataset, additional countries Country Country Country Adjusted Unadjusted Adjusted corp. group code business sector corp. sector sector global Australia AU 1970-2007 global Canada CA 1961-2014 global Costa Rica CR 1991-2016 global Iceland IS 1997-2016 global Japan JP 2007-2014 global Korea KR 1980-2015 2010-2016 2010-2016 global Malta MT 1995-2017 2000-2007 global Norway NO 1970-2015 1978-2017 2012-2015 global New Zealand NZ 2009-2015 1998-2016 global Turkey TR 2009-2016 2009-2015 global Taiwan TW 1980-2009 Note: Series for the adjusted business sector use data from KLEMS and STAN. Series for the unadjusted corporate sector use data from Karabarbounis and Neiman (2014) and OECD. Series for the adjusted corporate sector use data from the OECD.
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- The regressions are weighted by GDP measured in US dollars at market exchange rates. The eects have been normalized to equal to the average labor share in 1995.
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- The regressions are weighted by GDP measured in US dollars at market exchange rates. The eects have been normalized to equal to the average labor share in 1995.
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- United Nations (2008). System of National Accounts 2008. Appendix for Revisiting the Global Decline of the (Non-Housing) Labor Share" A. Data We use two National account databases to measure labor shares: sector and industry accounts.
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- US EU27 EU14 LT EU4 DE MT SK EE ES HU UK CZ LU LV IE BG CY EL Unadjusted corporate sector (K. & N., 2014) Adjusted business sector (KLEMS) Source: authors' calculations using EU KLEMS and Karabarbounis and Neiman (2014). The gure shows estimated trends in the labor share for all countries and years available in both datasets. Trend coecients are reported in units per 10 years (i.e. a value of-5 means a 5 percentage point decline every 10 years). EU4 includes France, Italy, Germany and the UK. EU14 includes EU4 as well as Austria, Belgium, Denmark, Greece, Spain, Finland, Luxembourg, the Netherlands, Portugal and Sweden. EU27 includes all EU countries except Malta.
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- US UK SE CZ CY AT LT ES EU27 JP EU14 NO EU4 SI BG EE FR TR IT EL FI LV post-2000 1970-2015 Source: authors' calculations using EU KLEMS data for the business sector. The gure shows estimated trends in the labor share for all countries and years available in the dataset. Trend coecients are reported in units per 10 years (i.e. a value of-5 means a 5 percentage point decline every 10 years). EU4 includes France, Italy, Germany and the UK. EU14 includes EU4 as well as Austria, Belgium, Denmark, Greece, Spain, Finland, Luxembourg, the Netherlands, Portugal and Sweden. EU27 includes all EU countries except Malta.
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