Growth, Automation and the Long-Run Share of Labor

Dilip Mookherjee and Debraj Ray

Review of Economic Dynamics, 2022, vol. 46, 1-26

Abstract: We study the long run implications of workplace automation induced by capital accumulation. We describe a minimal set of sufficient conditions for sustained growth, along with a declining labor share of income in the long run: (i) a basic asymmetry between physical and human capital; (ii) the technical possibility of automation in each sector; (ii) a self-replication condition on the production function for robot services; (iv) asymptotic homotheticity (more generally neutrality) of demand, and (v) a minimal degree of patience or intergenerational altruism among a fraction of households. However, the displacement of human labor is gradual, and absolute real wages could rise indefinitely. The results obtain in the absence of any technical progress; they extend to endogenous technical progress even if such progress is not biased ex ante in favor of automation. (Copyright: Elsevier)

Keywords: Automation; Inequality; Factor shares; Human capital; Technical progress (search for similar items in EconPapers)
JEL-codes: D33 E24 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Working Paper: Online Appendix to "Growth, Automation and the Long-Run Share of Labor" (2021)
Working Paper: Growth, Automation, and the Long-Run Share of Labor (2020)
Working Paper: Growth, Automation and the Long Run Share of Labor (2020)
Working Paper: Growth, Automation and the Long Run Share of Labor (2020)
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DOI: 10.1016/j.red.2021.09.003

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