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Capital's share of income #4

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jdebacker opened this issue Jul 20, 2023 · 0 comments

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jdebacker commented Jul 20, 2023

A relevant parameter for the aggregate production function is capital's share of income.

To compute this for VA, we can start by finding labor's share of income: (wages + salaries)/GDP.

Total wages and salaries for VA in 2022 are (from the QCEW) are: $281,420,499,712

And divide by VA's GDP from the BEA state estimates. In 2022 this was $649,393 million.

The labor share of income thus equals: 281,420,499,712/649,393,000,000 = 0.43335930586255167

Capital share = 1 - labor share = 1 - 0.433 = 0.567.

This seems a bit high, the for the whole use, the capital share is about 0.38.

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