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Investigating the Labor and Capital Contributions and their Effective Factors in Iran (in Persian)

Author

Listed:
  • Dadgar, Yadollah

    (Faculty of Economic and Political Sciences, Shahid Beheshti University, Tehran, Iran.)

  • Taheri, Simin

    (Economics, Shahid Beheshti University, Tehran, Iran.)

  • Taee, Hassan

    (Faculty of Economics, University of Allameh Tabatabai, Tehran, Iran.)

Abstract

One of the main issues in economy is the extent of labor and capital contributions in production of goods and services; since the contribution of production factors is a main step in economic planning and policy making that aim to reduce the class gap and income inequality. This study, following Piketty approach, investigates the labor and capital contributions for Iran`s economy during 1985-2014. In calculating the share of such factors, oil-based and non-oil-based GDP were taken into account. To achieve this objective, the effective factors on labor and capital contribution have been estimated using Auto-Regressive Distributed Lag (ARDL). The results indicate a direct relationship between minimum wage and labor productivity indices, and negative relationship of inflation rate, unemployment rate and profit margin of exchange rate with labor contribution in national income. Moreover, the results indicate a direct relationship between capital inventory and rate of return, and a negative correlation between inflation, capital price and gross domestic product with capital contribution in national income. The sign of oil-free model coefficients, except for the unemployment rate coefficient, are similar to those of the oil-based labor share model. Factors influencing the share of capital in national income are similar to those factors that affect the share of labor in income, despite the fact that the sign of the coefficients is different.

Suggested Citation

  • Dadgar, Yadollah & Taheri, Simin & Taee, Hassan, 2020. "Investigating the Labor and Capital Contributions and their Effective Factors in Iran (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 25(1), pages 3-28, May.
    • Handle: RePEc:auv:jipbud:v:25:y:2020:i:1:p:3-28
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    More about this item

    Keywords

    Piketty; Contribution of Labor Factor; Contribution of Capital Factor; Auto-Regressive Distributed Lag (ARDL) Pattern; Rate of Return on Capital.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C89 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution

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