earticle

영어

This paper re-examines the issue of declining (increasing) labor (capital) income share using a general equilibrium model. In order to evaluate Rognlie’s hypothesis within the context of Korea, our model incorporates both population aging and housing production. Calibration of the model suggests that population aging may generate a modest increase in the capital income share over the next few decades, through rising housing rental income. However, the main driver of this result is not necessarily the “scarcity” of housing that Rognlie stresses. We find that the housing rents-to-income ratio increases not through higher rental costs but through greater housing production.