Decreasing Hours, the Labor Share, and the Elasticity of Substitution

2017 ◽  
Author(s):  
Rafael Serrano Quintero
Keyword(s):  
Elasticity Of Substitution ◽  
Labor Share

scholarly journals Employment Protection Deregulation and Labor Shares in Advanced Economies

2020 ◽  
pp. 1-44
Author(s):  
Gabriele Ciminelli ◽  
Romain Duval ◽  
Davide Furceri
Keyword(s):  
Employment Protection ◽  
Elasticity Of Substitution ◽  
Negative Effects ◽  
Labor Share ◽  
Advanced Economies ◽  
The Impact ◽  
Identification Strategy

This paper assesses the impact of job protection deregulation on the labor share in a sample of 26 advanced economies during the 1970-2013 period, using a newly constructed dataset of major reforms in this area. We employ a difference-indifferences identification strategy using two identifying assumptions grounded in theory – deregulation has larger effects in industries characterized by (i) a higher ‘natural’ propensity to regularly adjust the workforce, and (ii) a lower elasticity of substitution between capital and labor. We find significant negative effects of deregulation on the labor share, contributing to about a tenth of its observed decline in advanced economies.

scholarly journals Modeling Automation

2018 ◽  
Vol 108 ◽  
pp. 48-53 ◽  
Author(s):  
Daron Acemoglu ◽  
Pascual Restrepo
Keyword(s):  
Technological Change ◽  
Comparative Advantage ◽  
Capital Accumulation ◽  
Elasticity Of Substitution ◽  
Labor Share ◽  
Realistic Parameter ◽  
Parameter Values

Modeling automation as factor-augmenting technological change has unappealing implications. Instead, modeling it as the process of machines replacing tasks previously performed by labor is both descriptively realistic and leads to distinct and plausible predictions. In contrast to factor-augmenting technological change, the automation of tasks always reduces the labor share and can reduce the equilibrium wage (for realistic parameter values). This approach to automation underscores the role of new tasks, changes in the comparative advantage of labor, the possibility that machines become more productive in automated tasks, and the elasticity of substitution and capital accumulation in the adjustment of the economy.

scholarly journals Technological Changes, Offshoring, and the Labor Share

2019 ◽  
Vol 2019 (142) ◽  
Author(s):  
Weicheng Lian
Keyword(s):  
Developing Economies ◽  
Relative Price ◽  
Downward Trend ◽  
Elasticity Of Substitution ◽  
Technological Changes ◽  
Labor Share ◽  
Investment Goods

Existing studies on the downward trend in the labor share of income mostly focus on changes within individual countries. I document, however, that half of the global decline in the labor share of income can be traced to the relocation of activities between countries. I develop a two-country model to show that when the relative price of investment goods falls, production activities with a small elasticity of substitution between capital and labor tend to get offshored from high- to low-wage countries. The model provides an explanation as to why such relocation may drive the labor share down in both developed and developing economies, as well as globally.

The Elasticity of Substitution in Demand for Non-Tradable Goods in Costa Rica

2004 ◽  
Author(s):  
Gilberto E. Arce ◽  
Edgar Robles C.
Keyword(s):  
Costa Rica ◽  
Elasticity Of Substitution ◽  
Tradable Goods

The Estimation of Elasticity of Substitution of CES Production Function

2011 ◽  
Author(s):  
Tomas Miklosovic ◽  
Ivan Lichner
Keyword(s):  
Production Function ◽  
Elasticity Of Substitution

The Elasticity of Substitution Revisited: The Effects of Secular Changes in Labor Force Structure

1985 ◽  
Vol 3 (4) ◽  
pp. 490-507 ◽  
Author(s):  
Carmel U. Chiswick
Keyword(s):  
Labor Force ◽  
Elasticity Of Substitution ◽  
Secular Changes ◽  
Force Structure
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