Author

Nak-Nyeon Kim (김낙년)

Title 

한국의 기능별 소득분배: 노동생산성 임금 노동소득분배율

(KIRL Working Paper 2023-01)

Year

2023

Abstract

This article reviews the debates (Park Jong-kyu 2013; Park Jungsoo 2019; Kim Yu-sun 2019; Joo Sang-young and Jeon Su-min 2019; Lee Kang-guk 2019; Park Jeong-soo 2020) surrounding labor productivity, wages, and labor share in Korea. Self-employment is important in this debate. However, previous studies omitted quasi-corporations from the scope of self-employment income and included operating surplus of housing unrelated to self-employment, but this is corrected here. And while it has been argued that the gap between real GDP per employed person and real wage per worker (divided by consumer price index) has widened significantly since 2007, such gap disappears when labor productivity and real wages are compared on a consistent basis. Looking back to 1975, periods in which real wage growth was faster than labor productivity alternated between 1987(democratization), 1997(financial crisis), and 2010, respectively. The average rate of increase over the entire period was balanced. Reflecting this trend, the labor income share also rose, then fell, and recently turned to rise again. This trend in the labor income share explains well the trend of the top income share with a high share of capital income, but it is found to have poor explanatory power in the income distribution index including the wider class. 

Keywords labor productivity, wage, labor income share