Year: 2022
Type: article
Abstract: We propose a simple model to assess the evolution of the US labor share and how automation affects employment. In our model, heterogeneous firms may choose a manual technology and hire a worker subject to matching frictions. Alternatively, they may choose an automated technology and produce using only machines (robots). Our model suggests that automation reduces the labor share but increases employment and wages. Furthermore, our model suggests that labor market institutions are unlikely to have played a major role in the fall of the US labor share after 1987. Instead, technological factors are a more promising candidate.
Source: Labour Economics
Authors: Luís Guimarães, Pedro Mazeda Gil
Institutions: Queen's University Belfast, Universidade do Porto
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: hybrid
Estimated APC paid: $2,430
OpenAlex ID: W2914358972