Does Automation Technology increase Wage?

Ryosuke Shimizu and Shohei Momoda
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Ryosuke Shimizu: Assistant Professor, College of Economics, Aoyama Gakuin University
Shohei Momoda: Policy Research Institute, Ministry of Finance, Japan

Discussion papers from Policy Research Institute, Ministry of Finance Japan

Abstract: This paper examines the relationship between automation technology diffusion and the wage. In this model, producers either choose automation or non-automation technology, whichever is more profitable. Further, when the producers introduce automation technology, they must pay fixed costs, which differ between industries. The main results of this paper indicate that the improving the productivity of automation technology promotes automation diffusion, decreases labor share, and also decreases the wage when the level of automation technology diffusion is sufficiently high.

Keywords: automation; the wage; labor share decline; technology choice (search for similar items in EconPapers)
JEL-codes: E24 J23 O3 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2021-10
New Economics Papers: this item is included in nep-mac
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https://www.mof.go.jp/pri/research/discussion_paper/ron343.pdf First version, 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:mof:wpaper:ron343

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