What is labour income share?
The LIS reflects the labour compensation of the working population (employees and self-employed people) as a share of companies' net value added. The labour compensation of the self-employed, who account for approximately 20% of the total number of persons working in companies, is difficult to determine. In the regular LIS, their labour income is calculated on the basis of average employee compensation, which has presumably led to an overestimation of this income over the past two decades. This can in part be attributed to the broad definition of self-employed persons that Statistics Netherlands has applied since the revision of the National Accounts in 2010, as this definition also comprises babysitters and domestic workers, for example. The regular method to calculate the labour income of self-employed persons probably does not fit these groups. The overestimation of self-employed persons' labour income has increased since the financial crisis, as their average income has declined while the average income of employees increased. In construction, for example, a sector with a large share of self-employed persons, this has led the regular LIS to rise above 100%.