Sharing the fruits of growth from 1950 to 2008: A surplus-accounting approach

In this paper, we apply the surplus accounting methodology to analyze the distribution of the fruits of growth between production factors over the period 1950-2008. Three production factors are distinguished: paid employment, self-employment and capital. The surplus distributed to capital is nil on average. The employees received a surplus linked to the evolution of total factor productivity, which experienced a slowdown in the 1980s Since 2007, the distributed surplus has sharply dropped, due to an increase in external deduction. The evolution of the surplus is, then, confronted to value-added distribution, by focusing on the capital-labour substitution in the 1980s. The standard framework of surplus accounting is, finally, extended by taking the Welfare System and its financing into account. Indeed, even if the Welfare System is mostly financed by social contributions paid by production factors, social benefits are also distributed to agents who are not involved in the production process, namely the pensioners, the unemployed, and the non-working population. We find that the surplus distributed to employees is lower when social contributions are taken into account. In the meantime, a half-percentage point of the value-added growth rate is assigned each year to the financing of the old-age insurance, whose main part however (0.4 point) accrues tothe growing number of new pensioners. Nevertheless, the incomes after social benefits allocated to the employed, the unemployed, and pensioners grow at a similar pace.