scholarly journals The Rise of the Machines: Automation, Horizontal Innovation, and Income Inequality

2022 ◽  
Vol 14 (1) ◽  
pp. 179-223
Author(s):  
David Hémous ◽  
Morten Olsen
Keyword(s):  
Income Inequality ◽  
New Products ◽  
Skill Premium ◽  
Labor Share ◽  
Us Economy ◽  
The Us ◽  
Endogenous Growth Model ◽  
Recent Trends ◽  
New Perspective ◽  
Over Time

We build an endogenous growth model with automation (the replacement of low-skill workers with machines) and horizontal innovation (the creation of new products). Over time, the share of automation innovations endogenously increases through an increase in low-skill wages, leading to an increase in the skill premium and a decline in the labor share. We calibrate the model to the US economy and show that it quantitatively replicates the paths of the skill premium, the labor share, and labor productivity. Our model offers a new perspective on recent trends in the income distribution by showing that they can be explained endogenously. (JEL D31, E25, J24, J31, O33, O41)

How Prevalent is Performance-Related Pay in the United States? Current Incidence and Recent Trends

2013 ◽  
Vol 226 ◽  
pp. R4-R16 ◽  
Author(s):  
Maury Gittleman ◽  
Brooks Pierce
Keyword(s):  
United States ◽  
Explanatory Power ◽  
The United States ◽  
High Wage ◽  
Potential Explanation ◽  
Us Economy ◽  
The Us ◽  
Recent Trends ◽  
Current Incidence

We address basic questions about performance-related pay in the US. How widespread is it? What characteristics of employers and jobs are associated with it? What are recent trends in its incidence? What factors are responsible for these trends? Nearly two-fifths of hours worked in the US economy in 2013 were in jobs with performance-related pay, but this share has been declining. We consider several possible causes for this trend and find that they do not have much explanatory power. We do establish, however, that any potential explanation must also account for a long-term shift in the relative incidence of performance-related pay away from low-wage and toward high-wage jobs.

THE ROLE OF EDUCATION SIGNALING IN EXPLAINING THE GROWTH OF THE COLLEGE WAGE PREMIUM

2017 ◽  
Vol 23 (3) ◽  
pp. 1247-1286 ◽  
Author(s):  
Yu Zheng
Keyword(s):  
College Graduates ◽  
The United States ◽  
Skill Premium ◽  
Simultaneous Increase ◽  
Unskilled Labor ◽  
Signaling Mechanism ◽  
College Degrees ◽  
Us Economy ◽  
The Us

This paper incorporates an education signaling mechanism into a dynamic model of production and asks if “higher education as a signal” helps explain the simultaneous increase in the supply and price of skilled relative to unskilled labor in the United States since 1980. The key mechanism is that if college degrees serve as a signal of unobservable talent and talent is productive at the workplace, then improved access to college will enable a higher fraction of the population to signal talent by completing college, resulting in degrees being a better signal about talent and a widening skill premium. When I assess the contribution of signaling in the model calibrated to the US economy from 1980 to 2003, I find that about 10% of the increase in the skill premium can be attributed to the signaling mechanism, after adjusting for the potential decline in the quality of college graduates.

scholarly journals Going Solo: On the Substitutability between Paid-Employment and Self-Employment

2018 ◽  
Author(s):  
Emilio Congregado ◽  
Antonio A. Golpe ◽  
Vicente Esteve
Keyword(s):  
Structural Breaks ◽  
Developed Countries ◽  
Elasticity Of Substitution ◽  
Us Economy ◽  
Self Employment ◽  
Paid Employment ◽  
The Us ◽  
Recent Trends ◽  
Employment Rates

This paper provides estimates of the elasticity of substitution between operational and managerial jobs in the US economy covering a period of almost five decades, derived from an aggregate CES production function. Estimating the long-term relationship between (the log of) the aggregate employment/self-employment ratio and (the log of) the returns from paid-employment relative to self-employment and testing for structural breaks, we report different estimates of the elasticity of substitution in each of the two regimes identified. Our results help to understand and interpret one of the most intriguing aspects in the evolution of self-employment rates in developed countries: the reversal of the trend in self-employment rates. Our estimates show that a higher level of development is associated with a greater number of entrepreneurs and smaller firms. Some rationales for understanding the growth of the elasticity between paid-employment and self-employment, including the recent trends in the digital economy—are also suggested.

scholarly journals Fading Stars

2019 ◽  
Vol 109 ◽  
pp. 312-316 ◽  
Author(s):  
GermÁn GutiÉrrez ◽  
Thomas Philippon
Keyword(s):  
Productivity Growth ◽  
The Past ◽  
Us Economy ◽  
The Us ◽  
Over Time

We study the evolution of superstar firms in the US economy over the past 60 years. Contrary to common wisdom, superstar firms have not become larger or more productive but have become more profitable. The contribution of star firms to aggregate US productivity growth has fallen over time, from about 72 basis points per year before 2000 down to about 43 afterwards.

Commercial Real Estate as an Asset Class

2019 ◽  
Vol 11 (1) ◽  
pp. 153-171 ◽  
Author(s):  
Andra C. Ghent ◽  
Walter N. Torous ◽  
Rossen I. Valkanov
Keyword(s):  
Real Estate ◽  
Commercial Real Estate ◽  
Real Estate Investment ◽  
Academic Literature ◽  
Us Economy ◽  
The Us ◽  
Asset Class ◽  
Asset Classes ◽  
Over Time ◽  
Ownership Patterns

We survey the properties of commercial real estate (CRE) as an asset class. We first illustrate its importance relative to the US economy and to other asset classes. We then discuss CRE ownership patterns over time. While the academic literature has emphasized Real Estate Investment Trusts, about two-thirds of the value of CRE is owner occupied. We next study the return properties of CRE indices and discuss what is known about the returns to individual properties. We briefly discuss CRE debt before turning to property derivatives. Finally, we consider how including CRE in a portfolio affects the portfolio's performance.

The changing returns on IT investment

2020 ◽  
Vol 120 (11) ◽  
pp. 2025-2039
Author(s):  
Jing Fang ◽  
Xiaowei Liu ◽  
Wen Guang Qu
Keyword(s):  
Panel Data ◽  
Economic Analysis ◽  
Design Methodology ◽  
It Investment ◽  
Content Type ◽  
The Us ◽  
New Perspective ◽  
The Impact ◽  
Over Time ◽  
It Productivity

PurposePrior IT productivity research usually assumes constant returns on IT investment. This study suggests that the impact of IT investment on productivity may not be constant but may change with the IT investment scale and over time. Specifically, we divide IT investment into commercial IT and in-house IT and investigate their changing impacts on industry labor productivity.Design/methodology/approachA model of the productivity impacts of commercial IT and in-house IT with changing effects of scale and over time is developed and empirically tested based on industry-level panel data from the US. Bureau of Economic Analysis (BEA).FindingsThe returns on commercial IT investment increase with scale but decrease over time, while the returns on in-house IT increase over time.Originality/valueThis study provides a new perspective for IT productivity research by investigating the changing productivity impacts of IT investment. It also suggests that commercial IT and in-house IT should be distinguished, as they have different impacts on productivity.

UNDERSTANDING THE SUPPLY AND DEMAND FORCES BEHIND THE FALL AND RISE IN THE US SKILL PREMIUM

2017 ◽  
Vol 23 (06) ◽  
pp. 2191-2220 ◽  
Author(s):  
Francisco Parro
Keyword(s):  
Technological Change ◽  
Capital Accumulation ◽  
Supply And Demand ◽  
Skill Premium ◽  
Unified Framework ◽  
Product Demand ◽  
Us Economy ◽  
Assignment Model ◽  
The Us ◽  
Demand Shifts

I develop an assignment model to quantify, in a unified framework, the causal effects of supply and demand forces on the evolution of the college wage premium in the US economy. Specifically, I quantify the relative contributions of four different forces: (i) a within-sector non-neutral technological change, (ii) the creation of new high-skill services/sectors, (iii) polarizing product demand shifts, and (iv) shifts in the relative supply of skilled labor. The model considers endogenous human capital accumulation. I find that positive supply shifts completely explain the fall of the skill premium during the period 1970–1980. Demand forces play a major role in the post-1980 period, when the skill premium rises. Among the demand forces, the results show an increasing contribution of polarizing product demand shifts over the decades. On the other hand, the effect of the within-sector non-neutral technological change is more important in the earlier decades of the post-1980 period.

scholarly journals Common Ownership and the Secular Stagnation Hypothesis

2019 ◽  
Vol 109 ◽  
pp. 322-326 ◽  
Author(s):  
José Azar ◽  
Xavier Vives
Keyword(s):  
Interest Rates ◽  
Mild Condition ◽  
Market Concentration ◽  
Secular Stagnation ◽  
Labor Share ◽  
Sector Model ◽  
Us Economy ◽  
Common Ownership ◽  
The Us ◽  
Plausible Values

We extend the model in Azar and Vives (2018) to allow for investment and show that higher effective market concentration (augmented by common ownership) leads to lower equilibrium wages, real interest rates, lower output, lower labor share, and lower capital share as well (under a mild condition). We calibrate a multisector sector model of the US economy and find that the rise in common ownership may account for the broad evolution of labor and capital shares in the period 1985-2015 while measured increases in concentration cannot (under plausible values for elasticity parameters).

Sign in / Sign up

Export Citation Format

Share Document