Queen's University IRC

Long-Run Changes in the Labour Share of National Income in Canada, 1926-1966


Pradeep Kumar

January 1, 1971

The stability of the share of national income accruing to labour has long been a “statistical puzzle” in economic research. Although in recent years many empirical studies have revealed a rising share of labour, their conclusions have been disputed on statistical grounds. It has been argued that if adjustments are made for the earnings attributable to labour services of the self-employed and for the inter-industry shifts, the labour share of national income will show very little, if any, increase.

This monograph examines the long run behaviour of the labour share of national income in Canada. The unincorporated business income is divided into labour income and non-labour income, in order to examine the impact of such a division on the stability of the labour share. Since there have been significant inter-industry shifts in Canada over the past four decades, the monograph also analyzes the influence of these shifts on the secular movement of the share of labour in national income.

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