Functional distribution of Income in Latin America. A methodological perspective

Transcription

1 International expert group meeting Placing equality at the centre of the 2030 Agenda Functional distribution of Income in Latin America. A methodological perspective Soledad Villafañe ECLAC Office in Buenos Aires June 2018

2 ORGANIZATION Ò Motivation and Objectives Ò Methodology and sources Ò Results É Inter country analysis É Dynamics analysis Ò Final remarks

3 MOTIVATION AND OBJECTIVE Ò In a context of wage share decline trend in developed countries, the interest on functional income distribution was recovered Ò Several analysis focuses on causes: employment, labor institution, declining of unionization, financialization, globalization, offshoring of the labor-intensive component Ò Also, methodological discussions analyzing composition effects É Importance of consider self employment income É Sectoral composition of wage share and production. Ò Objective: to analyze the importance of productive structure on level and evolution of wage share in Latin America selected countries.

4 METHODOLOGY Ò Ò Sources. É National Accounts: Argentina, Brasil, Chile (2003), Colombia, Costa Rica, Guatemala (2001), Honduras, y México (2003) Methodology: shift-share analysis of the change in the aggregate wage share. É É The shift component summarizes the contributions of changes in within sector wage shares The share component reports the contributions of changes in sectoral composition S h i f t S h a r e Interaction

5 WAGE SHARE - COUNTRIES DIFFERENCES Latin America selected countries. Percentages. 2010

6 Latin America selected countries. Percentages WAGE SHARE SECTORAL HETEROGENEITY 28,3 19,5 38,5 28,1 39,3 37,2 34,3 25,1 77, A g ric u ltu re, L iv e sṫ, fo ṙ, M in in g M a n u fa c tu rin g E le c tric ity, G a s, W a te r su p p ly C o n stru c tio n T ra d e, re p a ir, h o te ls a n d T ra n sp o rt, sto ra g e, F in a n c ia l, re a l e sta te & p ro f C o m m u n ity, so c ia l & p e rṡ

7 BETWEEN COUNTRIES ANALYSIS Wage share and sectoral composition of Value Added. Percentage. Selected countries A. Wage share by sector B. Sectoral composition of Value Added HON Average Min Máx HON CHI CHI BRA MÉX COL MÉX MÉX GUA GUA GUA CHI MÉX GD1 GD2 GD3 GD4 GD5 GD6 GD7 GD8 GD9 TOTAL Average BRA Min Máx CHI GUA GUA CHI BRA MÉX HON CHI CHI MÉX COL MÉX HON GD1 GD2 GD3 GD4 GD5 GD6 GD7 GD8 GD9 GD1: Agriculture (Agriculture proper & Livestock), Forestry & Logging, Fishing and related activities. GD2: Mining; GD3. Manufacturing; GD4: Electricity, Gas, Water supply; GD5: Construction; GD6: Trade, repair, hotels and restaurants; GD7: Transport, storage & communication; GD8: Financial, real estate & prof servs; GD9: Community, social & pers. Services.

8 CROSS-COUNTRY ANALYSIS Shift-share analysis (related to an average economy ). Percentage point. Selected countries >Social Svs >Mining <Social Svs. <wage share <Social Svs >wage share >Social Svs <wage share <Social Svs >wage share (Manufact/Soc svs.) <wage share (Manufct/retail) <Social Svs Interaction Share Shift Total Arg Bra Chi Col Cos Gua Hon Méx

9 DYNAMICS ANALYSIS 8 Wage share variation by country. Percentage point. Selected countries * ,5 3,5 0,4 4,9 3,3-2 -4,0-3,6-2, Arg Bra Chi Col Cos Gua Hon Méx

10 DYNAMICS ANALYSIS Shift-share decomposition. Percentage point. Selected countries * >wage share (Social Svs,) >Retail >Mining <Social Svs. >wage share (enterprise and social svs.) but < %VA. Interaction Shift <wage share Share Total >wage share (Enterprise Svs, Retail, transport) >wage share >Enterprise and Social Svs, >Social Svs. <wage share <social svs. -8 Arg Bra Chi Col Cos Gua Hon Méx

11 LONG TERM ANALYSIS Wage Share and shift-share analysis. Argentina

12 LONG TERM ANALYSIS Wage Share and shift-share analysis. Argentina

13 LONG TERM ANALYSIS Wage Share and shift-share analysis. Korea Wage Share Shift-share Decomposition Interaction Share Shift Total

14 FINAL REMARKS Ò Importance to recover traditional analysis on functional income distribution, but improving sources of information Ò In developing countries we need to include self employment income and to incorporate movements in labor shares within industries into our analysis. From our analysis Ò Ò Ò Heterogeneity in wage share among countries in LA is associated with differences in labor share by sectors (shift component). Structural differences in terms of importance of each sector in total value added (share component) are less important. Labor share dynamics has been very heterogeneous among countries analyzed, but also is more associated to changes in labor share than changes in the productive structure Differences in labor share within sector was driven by institutions, technological, labor organization, unionizing power and capital intensity

15 MUCHAS GRACIAS!