Working Paper

August 2022

WP 22-25 The fraction of national income that accrues to labor is shrinking in many countries. This paper explores how automation affects the labor share in the long run and why IT-powered automation may be shifting the balance toward capital.

We study how advancements in automation technology affect the division of aggregate income between capital and labor in the context of long-run growth. Our analysis focuses on the fundamental trade-off between the labor-displacing effect of automation and its positive productivity effect in an elementary task-based framework featuring a schedule of automation prices across tasks linked to the state of technology. We obtain general conditions for the automation technology and technical change driving automation to be labor-share displacing. We identify a unique task technology that reconciles the Kaldor facts with the presence of automation along the balanced growth path. We show that this technology aggregates to the CobbDouglas production function thus providing novel task-based microfoundations for this workhorse functional form. We employ our theory to study the connection between the recent declines in the labor share and the unique nature of the current, IT-powered wave of automation.

by

March 2021

WP 21-11 We study the effect of modern automation on firm-level labor shares using a 2018 survey of 1,618 manufacturing firms in China.

This report analyzes the risks of automation and job opportunities for different demographic groups in the U.S. and 11 metropolitan areas in the Third Federal Reserve District. The study, by Lei Ding, Elaine Leigh, and Patrick Harker, attempts to clarify some misunderstanding on how automation impacts jobs.

Continued here:

Understanding Growth Through Automation: The Neoclassical Perspective - Federal Reserve Bank of Philadelphia