Working Paper: NBER ID: w13953
Authors: Martin S. Feldstein
Abstract: The level of productivity doubled in the U.S. nonfarm business sector between 1970 and 2006. Wages, or more accurately total compensation per hour, increased at approximately the same annual rate during that period if nominal compensation is adjusted for inflation in the same way as the nominal output measure that is used to calculate productivity. \n \nTotal employee compensation as a share of national income was 66 percent of national income in 1970 and 64 percent in 2006. This measure of the labor compensation share has been remarkably stable since the 1970s. It rose from an average of 62 percent in the decade of the 1960s to 66 percent in the decades of the 1970s and 1980s and then declined to 65 percent in the decade of the 1990s where it has again been from 2000 until the most recent quarter.
Keywords: productivity; wages; compensation; national income
JEL Codes: E24; J3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| productivity (O49) | total compensation (J33) |
| productivity (2000-2007) (O49) | total compensation (2000-2007) (J33) |
| nominal wage (J31) | marginal revenue product of labor (J49) |
| total compensation (J33) | labor's share of national income (E25) |
| productivity (O49) | nominal compensation change (J33) |