Earned and capital income 

Updated: 31.1.2017 - Next update: 16.3.2017
   
 
 
Share
The share of compensation of employees in national income was 59.8 per cent in 2015 and the share of property and entrepreneurial income was 24.5 per cent.

Source:
Statistics Finland / Annual national accounts


Description of indicator

Compensation of employees is defined as the total remuneration, in cash or in kind, payable by an employer to an employee in return for work done by the latter during the accounting period.

Property income is the income receivable by the owner of a financial asset or a tangible non-produced asset in return for providing funds to, or putting the tangible non-produced asset at the disposal of, another institutional unit.

By examining the development of labour and capital, i.e. the functional income distribution, it is possible make a broad analysis of economic growth as well as the development of income distribution and the labour market. Measuring the income distribution of the economy enables an assessment to be made of the development of national income and the factors influencing it. A more precise and more detailed analysis, on the other hand, requires the support of industry- and sector-specific information on the distribution of national income. Information on the relative development of earned and capital income is utilised in the development of income policy, for example. Accurate and comprehensive statistics on wage development can be of assistance in assessing the extent to which wage formation develops from the influence of changes in economic conditions and economic structures.

Sector-specific income distribution is directly linked to overall economic development, economic conditions for the business sector, and changes in the market shares of businesses. In addition to this, changes in income distribution are significantly affected by structural changes in the business sector and the labour market. Besides the measurement of income distribution, the income distribution development indicator also describes the relationship and balance between labour productivity and labour costs. Labour productivity and real labour costs should grow at the same rate to ensure that businesses’ internal income distribution remains stable.