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- Title
THE U.S. LABOR INCOME SHARE AND AUTOMATION SHOCKS.
- Authors
Charalampidis, Nikolaos
- Abstract
The causes and consequences of the 1964–2016 swings in the U.S. labor income share/labor share (LS) are parsed through the lens of a structural model estimated on aggregate and LS series jointly. Where conventional models fall short, the present model yields a counter‐cyclical LS unconditionally and in response to demand and monetary policy shocks, as well as a small wage pro‐cyclicality, via moderate wage indexation. Shifts in automation, workers' market power, investment efficiency, and the relative price of investment account for 54%, 24%, 6%, and 4% of LS fluctuations, respectively. Automation shocks explain the lion's share of the post‐2007 cyclical LS tumble and 11% of output cycles, and generate a distinctive counter‐cyclical labor response.
- Subjects
MONETARY policy; AUTOMATION; ECONOMIC shock; SOCIAL security individual investment accounts; WAGES
- Publication
Economic Inquiry, 2020, Vol 58, Issue 1, p294
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.12829