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Income shares revisited

The Review of Income and Wealth. October 11, 2013

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A number of recent studies claim that when properly computed, factor income shares across countries at different levels of development are essentially uniform. This note evaluates the methodology behind such findings and offers estimates using newly available data. The results for a group of 55 developed, developing, and transition economies for the period 1990–2008 lead us to reject the hypothesis of factor share convergence.