FIGURE 3-5: The Ratio of Labor Income to Total Income Labor income has remained about two-thirds of total income over a long period of time. This approximate constancy of factor shares is consistent with the Cobb–Douglas production function.

Data from: U.S. Department of Commerce. This figure is produced from U.S. national income accounts data. Labor income is compensation of employees. Total income is the sum of labor income, corporate profits, net interest, rental income, and depreciation. Proprietors’ income is excluded from these calculations, because it is a combination of labor income and capital income.