Social and Behavioral Sciences Commons^™

This paper proposes a method for estimating the factor shares using cross sectional household survey data containing detailed information on household income by source. The application of this method to the case of Mexico using data from every available household survey that is representative at the national level, yields the following results: (i) factor shares in Mexico are significantly higher than those obtained from National Income and Product Accounts (NIPA) data; and (ii) factor shares in Mexico have been relatively constant over the time period analyzed. The paper then develops the implications of the differences between factor shares obtained from …