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Bowley's Law
Bowley's law, also known as the law of the constant wage share, is a stylized fact of economics which states that the wage share of a country, i.e., the share of a country's economic output that is given to employees as compensation for their work (usually in the form of wages), remains constant over time. It is named after the English economist Arthur Bowley. Research conducted near the start of the 21st century, however, found wage share to have declined since the 1980s in most major economies. Origins The term ''Bowley's law'' was first used by Paul Samuelson in 1964 in the sixth American edition of his classic textbook ''Economics'' as a name for the stylized fact of a constant wage share. Thereby, Samuelson meant to honor the economist Arthur Bowley, who pioneered the collection and statistical analysis of wage data in the UK. Having already speculated in 1920 that the wage share might be constant and having found (together with Josiah Stamp) evidence for his speculation in ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Stylized Fact
In social sciences, especially economics, a stylized fact is a simplified presentation of an empirical finding. Stylized facts are broad tendencies that aim to summarize the data, offering essential truths while ignoring individual details. A prominent example of a stylized fact is: "Education significantly raises lifetime income." Another stylized fact in economics is: "In advanced economies, real GDP growth fluctuates in a recurrent but irregular fashion". However, scrutiny to detail will often produce counterexamples. In the case given above, holding a PhD may ''lower'' lifetime income, because of the years of lost earnings it implies and because many PhD holders enter academia instead of higher-paid fields. Nonetheless, broadly speaking, people with more education tend to earn more, so the above example is true in the sense of a stylized fact. Origin of the term When describing what is generally regarded as the first econometric macro model ever developed, Jan Tinbergen (1936) ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |