Can the Marginal Productivity Theory of Distribution be Tested?

This paper shows why attempts to test the neoclassical aggregate marginal productivity theory of distribution are inherently flawed. The use of constant-price value data and an underlying accounting identity mean that the close correspondence often found between the “output elasticities” of a putative aggregate production function and the relevant factor shares is a mere statistical artefact. Likewise, the results of estimating neoclassical labor demand functions must, for the same reason, always give spurious results. The authors received no financial support for the research, authorship and/or publication of this article.This is the accepted manuscript. The final version is available from Sage at http://rrp.sagepub.com/content/47/2/274.abstrac