Skip to main content
alt

Please enter a keyword and click the arrow to search the site

Or explore one of the areas below

Automation, growth and factor shares

Subject

Economics

Publishing details

Society for Economic Dynamics Meeting Papers

Authors / Editors

Martinez J

Biographies

Joseba Martinez

Publication Year

2018

Abstract

This paper investigates the extent to which automation can explain the observed fall in labor's share of income in the United States in the last 30 years. I model the production process as a set of tasks that can be performed by labor or automated machinery (capital). Aggregating over firms that operate capital with differing degrees of automation, total output of the economy is given by a Constant Elasticity of Substitution (CES) function, but with parameters determined endogenously by the distribution of automation technology across firms. This model of the aggregate production function can reconcile three important empirical findings on US production and growth that the canonical CES model cannot: declining labor shares, aggregate capital-labor complementarity, and capital-biased technical progress. Using industry-level data, including a novel measure of aggregate task inputs into production, I find evidence that automation was a significant driving force of the US labor share between 1972-2010

Series Number

736

Series

Society for Economic Dynamics Meeting Papers

Available on ECCH

No

View document


Select up to 4 programmes to compare

Select one more to compare
×
subscribe_image_desktop 5949B9BFE33243D782D1C7A17E3345D0

Sign up to receive our latest news and business thinking direct to your inbox

×

Sign up to receive our latest course information and business thinking

Leave your details above if you would like to receive emails containing the latest thought leadership, invitations to events and news about courses that could enhance your career. If you would prefer not to receive our emails, you can still access the case study by clicking the button below. You can opt-out of receiving our emails at any time by visiting: https://london.edu/my-profile-preferences or by unsubscribing through the link provided in our emails. View our Privacy Policy for more information on your rights.