Technical Progress And Labor Share Decline In The Manufacturing And Distribution Industry
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Technical Progress And Labor Share Decline In The Manufacturing And Distribution Industry
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Author : Michele Boldrin
language : en
Publisher:
Release Date : 2023
Technical Progress And Labor Share Decline In The Manufacturing And Distribution Industry written by Michele Boldrin and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023 with categories.
In the United States the share of national income accruing to labor has declined rapidly since the 1980s. The decline is mainly in the manufacturing and distribution sectors where both productivity and concentration increased faster than the rest of the economy. In these sectors, the decline of labor share is especially strong within large firms. We claim there is a common cause to these facts. If inputs are complementary in production and labor-saving technological progress is embodied in new machines then innovation causes a reduction in the labor share. We use a growth model with heterogeneous firms to illustrate the channels through which technological progress may drive down the labor share and increase productivity and concentration. Based on our calibration, labor-saving technical change accounts for up to $80 %$ of the labor share decline in the manufacturing and distribution sectors between 1987 and 2017.
Production Technology Market Power And The Decline Of The Labor Share
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Author : Agustin Velasquez
language : en
Publisher: International Monetary Fund
Release Date : 2023-02-10
Production Technology Market Power And The Decline Of The Labor Share written by Agustin Velasquez and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2023-02-10 with Business & Economics categories.
The labor share has been declining in the United States, and especially so in manufacturing. This paper investigates the role of capital accumulation and market power in explaining this decline. I first estimate the production function of 21 manufacturing sectors along time series and including time-varying markups. The elasticities of substitution for most sectors are estimated below one, implying that capital deepening cannot explain the labor share decline. I then track the long-run evolution of the labor share using the estimated production technology parameters. I decompose aggregate labor share changes into sector re-weights, capital-labor substitution, and market power effects. I find that the increase in market power, as reported in recent studies, can account for, at least, 76 percent of the labor share decline in manufacturing. Absent the rise in market power, the labor share would have remained constant in the second half of the 20th century.
Technological Progress Income Distribution And Unemployment
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Author : Hideyuki Adachi
language : en
Publisher: Springer
Release Date : 2019-01-04
Technological Progress Income Distribution And Unemployment written by Hideyuki Adachi and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-01-04 with Business & Economics categories.
This volume develops original methods of analyzing biased technological progress in the theory and empirics of economic growth and income distribution. Motivated by sharp increases in wage and income inequalities in the world since the beginning of the new century, many macroeconomists have begun to realize the importance of biased technological changes. However, the comprehensive explanations have not yet appeared. This volume analyzes the effects of factor-biased technological progress on growth and income distribution and shows that long-run trends of the capital-income ratio and capital share of income consistent with Piketty’s 2014 empirical results emerge. Incorporating the modified version of induced innovation theory into the standard neoclassical growth model, it also explains the long-run fluctuations of growth and income distribution consistent with the data shown in Piketty. Introducing a wage-setting function, the neoclassical growth model is modified to account for unemployment as well as to examine the dynamics of unemployment and the labor share of income under biased technological progress. Applying a new econometric method to Japanese industrial data, the authors test the key assumptions employed and important results derived in the theoretical part of this book.
Understanding National Accounts Second Edition
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Author : Lequiller François
language : en
Publisher: OECD Publishing
Release Date : 2014-10-20
Understanding National Accounts Second Edition written by Lequiller François and has been published by OECD Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-10-20 with categories.
This is an update of OECD 2006 "Understanding National Accounts". It contains new data, new chapters and is adapted to the new systems of national accounts, SNA 2008 and ESA 2010.
Why Is Labor Receiving A Smaller Share Of Global Income Theory And Empirical Evidence
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Author : Mai Chi Dao
language : en
Publisher: International Monetary Fund
Release Date : 2017-07-24
Why Is Labor Receiving A Smaller Share Of Global Income Theory And Empirical Evidence written by Mai Chi Dao and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-07-24 with Business & Economics categories.
This paper documents the downward trend in the labor share of global income since the early 1990s, as well as its heterogeneous evolution across countries, industries and worker skill groups, using a newly assembled dataset, and analyzes the drivers behind it. Technological progress, along with varying exposure to routine occupations, explains about half the overall decline in advanced economies, with a larger negative impact on middle-skilled workers. In emerging markets, the labor share evolution is explained predominantly by global integration, particularly the expansion of global value chains that contributed to raising the overall capital intensity in production.
Essays On The Impact Of Technological Progress On The U S Labor Markets
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Author : MUSA ORAK
language : en
Publisher:
Release Date : 2016
Essays On The Impact Of Technological Progress On The U S Labor Markets written by MUSA ORAK and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016 with categories.
This dissertation studies the impact of technological progress on various aspects of the U.S. labor markets such as the recent decline in the labor's share of income, job and wage polarization, rising income and wealth inequalities and skill accumulation. Chapter 1, "Capital-Task Complementarity and the Decline of the U.S. Labor Share of Income," studies how changes in occupational composition of the labor force contributes to the recent decline of the US labor share of income. Following the job polarization literature and classifying labor by tasks performed, I estimate unitary elasticity between equipment capital and labor performing non-routine tasks. This implies that income loss of labor em- ployed in routine task occupations is the main driver of the decline of the aggregate labor share. For a given path of technological change, decline of the labor share is larger when: (i) the substitutability between equipment capital and routine tasks is stronger, and (ii) equip- ment capital has a larger weight in production. Furthermore, a dynamic general equilibrium model shows that the impact of permanent technology shocks on the labor share gets smaller as the fraction of routine task labor declines. Consistent with this, the model predicts that the labor share should stabilize at around 55% in the long-run even if technological progress continues at its current pace. The model also documents that the fall in relative equipment capital prices alone can explain 72% of the decline of the labor share for the 1967-2013 period. Finally, repeating the analysis by disaggregating labor into educational groups reveals that the theory based on capital-task interactions improves on the capital-skill complementarity theory in explaining the decline of the labor share. Chapter 2, "Impact of Information Technology on the Labor Share: Evidence from the U.S. Sectoral Data," contributes to the debate over the relationship between capital deep- ening and the aggregate labor share from a sectoral perspective. The study focuses on a specific group of equipment capital: information and communication technology (ICT) capital and exploits various sectoral heterogeneities to characterize the conditions under which the surge in ICT capital cause the labor share to fall. First, I document significant capital- task complementarity at each sector. Second, decline in ICT capital prices turns out to have a positive impact on the labor share. However, gains of labor devoted to non-routine task occupations are offset by the losses of labor employed in routine task occupations when a sector has: (i) initially high load of employment in routine task occupations, and (ii) weak absolute complementarity between ICT capital and labor working in occupations associated with non-routine tasks. Since sectors satisfying these two conditions have compromised the majority of the economy, the aggregate labor share has exhibited a downward trend so far, leading to the illusion that information technology has been driving the labor share downwards. However, there are two promising facts concerning the future: in one hand, the share of these sectors in value added is persistently falling and on the other hand, the share of routine task employment continues to fall at every sector. Thus, once the structural shifts and within sectoral adjustments are completed, the decline in the labor share should revert back. Chapter 3, "Job Polarization, Skill Accumulation and Wealth Inequality," is one of the first attempts in literature to incorporate the job polarization idea into an otherwise standard incomplete markets model with heterogeneous agents in two dimensions: skills and idiosyn- cratic productivity shocks. This set up allows us to contribute to the existing literature in two ways: (i) linking job polarization with rising wealth concentration, and (ii) modeling the continuous rise in skill supply in response to technological progress and job polarization accompanying it over time. When calibrated and solved for the years 1981 and 2011, the model shows that the decline in relative computer (ICT) capital prices alone accounts for a significant portion of the increases in employment share and relative wages of high skill occupations, as well as the increase in the supply of labor with a college or above-college degree. Consistent with the routinization hypothesis, the model also shows that advances in computer technology can account for most of the decline of the employment share and rela- tive wage of middle class over the three decades between 1981 and 2011. Furthermore, the model successfully captures the erosion of middle-class wealth, whereas wealth concentration rises substantially at the right tail and slightly at the left tail of the wealth distribution.
Technology And The Future Of Work
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Author : Adrian Peralta-Alva
language : en
Publisher: International Monetary Fund
Release Date : 2018-09-28
Technology And The Future Of Work written by Adrian Peralta-Alva and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018-09-28 with Business & Economics categories.
This paper uses a DSGE model to simulate the impact of technological change on labor markets and income distribution. It finds that technological advances offers prospects for stronger productivity and growth, but brings risks of increased income polarization. This calls for inclusive policies tailored to country-specific circumstances and preferences, such as investment in human capital to facilitate retooling of low-skilled workers so that they can partake in the gains of technological change, and redistributive policies (such as differentiated income tax cuts) to help reallocate gains. Policies are also needed to facilitate the process of adjustment.
Labor Income Share
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Author : Saumik Paul
language : en
Publisher: Palgrave Macmillan
Release Date : 2021-10-16
Labor Income Share written by Saumik Paul and has been published by Palgrave Macmillan this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-10-16 with Business & Economics categories.
This book is about labor income share, which measures the share of national income paid in wages. The global share of income going towards labor is declining, which suggests a more unequal distribution of income. This has sparked debates about fair distribution of personal incomes among academics and policymakers alike. This book joins the discussion by bringing together recent developments in theoretical and empirical research on labor income share and novel insights on the measurement of the labor income share. The aim of this book is to help design policies to reduce inequality and provide useful knowledge to academics, policymakers from government agencies, policy aides in research institutions and think tanks, and broader audiences from public and private organizations.
The Micro Level Anatomy Of The Labor Share Decline
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Author : Matthias Kehrig
language : en
Publisher:
Release Date : 2018
The Micro Level Anatomy Of The Labor Share Decline written by Matthias Kehrig and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with Automation categories.
The labor share in U.S. manufacturing declined from 62 percentage points (ppts) in 1967 to 41 ppts in 2012. The labor share of the typical U.S. manufacturing establishment, in contrast, rose by over 3 ppts during the same period. Using micro-level data, we document five salient facts: (1) since the 1980s, there has been a dramatic reallocation of value added toward the lower end of the labor share distribution; (2) this aggregate reallocation is not due to entry/exit, to "superstars" growing faster or to large establishments lowering their labor shares, but is instead due to units whose labor share fell as they grew in size; (3) low labor share (LL) establishments benefit from high revenue labor productivity, not low wages; (4) they also enjoy a product price premium relative to their peers, pointing to a significant role for demand-side forces; and (5) they have only temporarily lower labor shares that rebound after five to eight years. This transient pattern has become more pronounced over time, and the dynamics of value added and employment are increasingly disconnected.
The Impact Of Technological Change On Employment And Economic Growth
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Author : Richard Michael Cyert
language : en
Publisher: Ballinger Publishing Company
Release Date : 1988
The Impact Of Technological Change On Employment And Economic Growth written by Richard Michael Cyert and has been published by Ballinger Publishing Company this book supported file pdf, txt, epub, kindle and other format this book has been release on 1988 with Business & Economics categories.
Job desplacement; The employment and labor market adjustment: evidence from the displaced worker surveys; Technological change and the extent of frictional and structural unemployment; The effects of technological change on skills and the distribution of earnings and income; Sectoral patterns of technology adoption; Trade, tax, and diffusion policy issues.