The second contribution was in the estimate of the factor-income shares. For most
growth accounting exercises, the derivation of factor income shares is very difficult. In
Thailand, as in many developing countries, a very large proportion of income accrues to
unincorporated enterprises, the self-employed. The income of unincorporated businesses
averaged about 60 percent of national income in the 1970s, and has remained in the range of 30-
40 percent in recent years. It is a mixed income category that includes the returns to capital and
entrepreneurship as well as labor. The authors imputed to the self-employed the average wage
rate of employees, and computed capital income as a residual. They benchmarked their
measures of the wage bill to the 1987 social accounting matrix (SAM). The inclusion of a wage
for the self-employed raised the share of labor compensation in aggregate GDP from 24 to 60
percent in 1977, but the labor share declines sharply between 1984 and 1990, from 63 to 49
percent.7 Their methodology also allowed them to capture the large difference between the wage
rates of workers in agriculture and non-agriculture.