Monday, May 9, 2011

Share of Labor

A subset of the population does not like that economists use mathematics. Theories of various current events are often given.  Such theories, if they are to replace the sort of "economics 101" that is now taught, need to explain phenomena like the one displayed graphically below: the remarkable stability of labor's share of national income (click to enlarge).
It's almost a miracle it has fluctuated so little in the past 64 years, as the proportion of women in the U.S. workforce (for example) rose from 15% to over 50%, while proportion of men employed shrank a small amount.  

Explaining stylized facts like these is the first step in being taken seriously.  

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