Sectoral Labor Income Share Dynamics: Cross-Country Evidence from a Novel Data Set
The government service sector accounts for the largest share of labor income in many countries.
Despite steady growth of literature on labor income share, empirical studies are limited mostly to country-level analysis. At the sector level, data on labor income share are available only for advanced countries. We overcome this constraint and provide some preliminary outcomes from a novel data set we compiled from 10 sectors in 53 countries, including 20 developing countries. The preliminary evidences suggest that at the disaggregated level, government services show the highest share of labor income (46%), while public utilities (16%) and mining (20%) have the lowest. The unweighted average labor income share in developing countries is slightly lower than in developed countries. We find considerable variation in the labor income share estimates within each region and within each broad category of sectors, measured over time.
WORKING PAPER NO: 875