EconPapers    
Economics at your fingertips  
 

Explaining the labor share: automation vs labor market institutions

Luis Guimaraes and Pedro Gil ()

No 19-01, Economics Working Papers from Queen's Management School, Queen's University Belfast

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 offers three main insights. First, automation-augmenting shocks reduce the labor share but increase employment and wages. Second, labor market institutions play an almost insignificant role in explaining the labor share. Third, the US labor share only (clearly) fell after 1987 because of a contemporaneous acceleration of automation's productivity.

Keywords: Automation; Labor Share; Technology Choice; Employment; Matching Frictions (search for similar items in EconPapers)
JEL-codes: E24 J64 L11 O33 (search for similar items in EconPapers)
Pages: 59 pages
Date: 2019-05
New Economics Papers: this item is included in nep-mac and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed

Downloads: (external link)
ftp://ftp.qub.ac.uk/pub/users/repec/qub/wpaper/MS_WPS_ECO_19_01.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Failed to connect to FTP server ftp.qub.ac.uk: A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond.

Related works:
Working Paper: Explaining the labor share: automation vs labor market institutions (2019) Downloads
Working Paper: Explaining the labor share: automation vs labor market institutions (2019) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qub:wpaper:1901

Access Statistics for this paper

More papers in Economics Working Papers from Queen's Management School, Queen's University Belfast Contact information at EDIRC.
Bibliographic data for series maintained by Mark McGovern ().

 
Page updated 2020-07-03
Handle: RePEc:qub:wpaper:1901