The Elusive Explanation for the Declining Labor Share

Grossman, Gene M.; Oberfield, Ezra

doi:10.3386/w29165

Cited by 14 publications

(8 citation statements)

References 77 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Here,

σ_{i}

is the elasticity of substitution between capital and labor in industry i , and

d \ln w_{i}

and

d \ln R_{i}

are observed factor price changes facing industry i . The term

s_{i}^{K} \cdot false(1 - σ_{i} false) \cdot false(d \ln w_{i} - d \ln R_{i} false)

corrects for the endogenous changes in labor share due to factor prices and isolates the direct impact of automation on the labor share (see also Grossman and Oberfield (2021)). In the text, we also set

σ_{i} = 1

λ = 0.5

, and

π_{g i} = π_{i} = 30 %

, and explore robustness to variations in each one of these parameters in Table A‐XI) 33…”

Section: General Equilibrium Effects and Quantitative Analysismentioning

confidence: 99%

“…) corrects for the endogenous changes in labor share due to factor prices and isolates the direct impact of automation on the labor share (see also Grossman and Oberfield (2021)). In the text, we also set σ i = 1, λ = 0 5, and π gi = π i = 30%, and explore robustness to variations in each one of these parameters in Table A-XI).…”

Section: Parameterization Calibration and Estimationmentioning

confidence: 99%

See 1 more Smart Citation

Tasks, Automation, and the Rise in U.S. Wage Inequality

Acemoğlu¹,

Restrepo

2022

ECTA

140

View full text Add to dashboard Cite

We document that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation. We develop a conceptual framework where tasks across industries are allocated to different types of labor and capital. Automation technologies expand the set of tasks performed by capital, displacing certain worker groups from jobs for which they have comparative advantage. This framework yields a simple equation linking wage changes of a demographic group to the task displacement it experiences. We report robust evidence in favor of this relationship and show that regression models incorporating task displacement explain much of the changes in education wage differentials between 1980 and 2016. The negative relationship between wage changes and task displacement is unaffected when we control for changes in market power, deunionization, and other forms of capital deepening and technology unrelated to automation. We also propose a methodology for evaluating the full general equilibrium effects of automation, which incorporate induced changes in industry composition and ripple effects due to task reallocation across different groups. Our quantitative evaluation explains how major changes in wage inequality can go hand‐in‐hand with modest productivity gains.

show abstract

“…Here,

σ_{i}

is the elasticity of substitution between capital and labor in industry i , and

d \ln w_{i}

and

d \ln R_{i}

are observed factor price changes facing industry i . The term

s_{i}^{K} \cdot false(1 - σ_{i} false) \cdot false(d \ln w_{i} - d \ln R_{i} false)

σ_{i} = 1

λ = 0.5

, and

π_{g i} = π_{i} = 30 %

, and explore robustness to variations in each one of these parameters in Table A‐XI) 33…”

Section: General Equilibrium Effects and Quantitative Analysismentioning

confidence: 99%

Section: Parameterization Calibration and Estimationmentioning

confidence: 99%

Tasks, Automation, and the Rise in U.S. Wage Inequality

Acemoğlu¹,

Restrepo

2022

ECTA

140

View full text Add to dashboard Cite

show abstract

“…First, I document a new channel through which multinational acquisitions can redistribute income between production factors, thus shedding light on the distributional implications of the technological change arising from multinational ownership. Second, I extend the argument that globalization and technological change are among the leading drivers of the observed manufacturing labor share decline in many countries (see Grossman and Oberfield (2022) for a survey). Rather than alternative forces, I show that globalization (in the form of MNEs) and technological change (in the form of robots) may interact and reinforce each other in driving the downward trend.…”

Section: Introductionmentioning

confidence: 67%

“…Finally, this paper contributes to the debate about the determinants of the labor share decline in many economies. Previous research identifies technological change and globalization as two major drivers of this trend (see Grossman and Oberfield, 2022, for a survey). Technological explanations include capitalbiased technical change (Karabarbounis and Neiman, 2014), intangible and modern capital adoption (Koh, Santaeulàlia-Llopis and Zheng, 2020;Aghion, Bergeaud, Boppart, Klenow and Li, 2022), and automation (Acemoglu and Restrepo, 2018).…”

Section: Introductionmentioning

confidence: 99%

Multinationals, Robots, and the Labor Share

Leone

2023

SSRN Journal

View full text Add to dashboard Cite

“…2 See Elsby et al (2013), Karabarbounis and Neiman (2014) for earlier studies and Gutiérrez and Piton (2020) for a comparison of the trends in the labor share across advanced economies. Grossman and Oberfield (2022) presents an excellent review of this vast literature.…”

Section: Introductionmentioning

confidence: 99%