New Technologies and the Labor Market
Friday, Jan. 6, 2017 2:30 PM – 4:30 PM
Hyatt Regency Chicago, Crystal B
- Chair: Daron Acemoglu, Massachusetts Institute of Technology and NBER
Demographics and Robots
AbstractModels of the wreck of technological change link the development and adoption of technologies to changes in relative factor supplies and prices. One of the most major changes in factor supplies is underway due to the aging of the population of almost all advanced economies. We argue that this demographic transition generates a shortage of labor and should trigger the adoption of robots aimed at economizing on the expected increases in the cost of labor, especially the labor of young workers. We document that consistent with this hypothesis there is a strong cross-country correlation between adoption of reports and the aging of the population.
Concentrating on the Falling Labor Share
AbstractRecent literature documents a substantial decline in labor’s share of value-added across numerous developed countries in recent decades, with the steepest falls occurring after the year 2000. But there is little consensus on the underlying causes or economic implications of this phenomenon. We provide detailed evidence and a simple conceptual model to interpret the fall in the labor share. Analyzing representative firm-level microdata, we document that the decline in the labor share is primarily a between- firm phenomenon, whereby large, capital intensive firms have increased their share of aggregate value-added. There is a rising correlation between firm market share and capital intensity in most sectors. Second, industry concentration, measured by firm market shares, has risen as well. Finally, industries that exhibited the greatest increases in concentration experienced the largest falls in labor share. We present a theory of ‘superstar firms’ where rising firm concentration and falling labor shares both stem from an increase in winner-take- all competition in product markets, possibly spurred by technological change, globalization, or deregulation.
- D0 - General