Labour continued to decline as share of the economy in 2023

© ANP / Peter Hilz
The labour income share for the market sector fell from 69.4 percent in 2022 to 69.0 percent in 2023. This figure fluctuates from year to year, but has been on a downward trend since 1995. In 1995, the labour income share for the market sector was 81.4 percent. Statistics Netherlands (CBS) reports this on the basis of newly revised figures.
The labour income share is an important indicator that reflects who benefits from economic output. It represents the share of income earned from labour within the total income earned in the Dutch economy. Labour income is the sum of compensation of employees plus the mixed income earned by self-employed people. In addition to labour income, total earned income consists of businesses’ operating profit.

The labour income share fell in 2023 as businesses' operating profit grew faster than income from labour. This relates to the labour income share for the market sector: the overall economy except for public administration, education, health and social work, real estate activities, mining and quarrying and financial and insurance activities. The labour income share had already fallen in 2022, as profits also rose faster than income from labour.


Different trends in different sectors

In 2022 and 2023, the labour income share declined in manufacturing, energy supply, construction, specialised business services and rental and other business services, among other sectors. However, it increased in agriculture, forestry and fisheries, information and communication, trade, and transportation and storage.

Energy supply saw the sharpest decline in the labour income share in recent years. This was the result of a stronger increase in production value than in costs, which led to an increase in the profit ratio, the share of operating profit in gross value added.


Revision of the national accounts

The national accounts are revised periodically, a process that involves introducing new sources, methods and concepts. CBS does this to ensure that its picture of the Dutch economy is optimally aligned with all the underlying statistics, sources and international standards for compiling national accounts. This also affects the statistics used to calculate the labour income share.

In recent years, operating profit has been adjusted upwards, while compensation of employees and net mixed income have seen a relatively smaller revision. As a result, the revised time series for the labour income share in the market sector shows a more pronounced trend than the old time series.

Sources

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