Growth, automation, and the long-run share of labor

Debraj Ray; Dilip Mookherjee

doi:10.1016/j.red.2021.09.003

Growth, automation, and the long-run share of labor

Debraj Ray, Dilip Mookherjee

Research output: Contribution to journal › Article › peer-review

Abstract

We study the long run implications of workplace automation induced by capital accumulation. We describe a minimal set of sufficient conditions for sustained growth, along with a declining labor share of income in the long run: (i) a basic asymmetry between physical and human capital; (ii) the technical possibility of automation in each sector; (ii) a self-replication condition on the production function for robot services; (iv) asymptotic homotheticity (more generally neutrality) of demand, and (v) a minimal degree of patience or intergenerational altruism among a fraction of households. However, the displacement of human labor is gradual, and absolute real wages could rise indefinitely. The results obtain in the absence of any technical progress; they extend to endogenous technical progress even if such progress is not biased ex ante in favor of automation.

Original language	English (US)
Pages (from-to)	1-26
Number of pages	26
Journal	Review of Economic Dynamics
Volume	46
DOIs	https://doi.org/10.1016/j.red.2021.09.003
State	Published - Oct 2022

Keywords

Automation
Factor shares
Human capital
Inequality
Technical progress

ASJC Scopus subject areas

Economics and Econometrics

Access to Document

10.1016/j.red.2021.09.003

Cite this

@article{68d622840c1f4d658f384f38c2a70338,

title = "Growth, automation, and the long-run share of labor",

abstract = "We study the long run implications of workplace automation induced by capital accumulation. We describe a minimal set of sufficient conditions for sustained growth, along with a declining labor share of income in the long run: (i) a basic asymmetry between physical and human capital; (ii) the technical possibility of automation in each sector; (ii) a self-replication condition on the production function for robot services; (iv) asymptotic homotheticity (more generally neutrality) of demand, and (v) a minimal degree of patience or intergenerational altruism among a fraction of households. However, the displacement of human labor is gradual, and absolute real wages could rise indefinitely. The results obtain in the absence of any technical progress; they extend to endogenous technical progress even if such progress is not biased ex ante in favor of automation.",

keywords = "Automation, Factor shares, Human capital, Inequality, Technical progress",

author = "Debraj Ray and Dilip Mookherjee",

note = "Publisher Copyright: {\textcopyright} 2021 Elsevier Inc.",

year = "2022",

month = oct,

doi = "10.1016/j.red.2021.09.003",

language = "English (US)",

volume = "46",

pages = "1--26",

journal = "Review of Economic Dynamics",

issn = "1094-2025",

publisher = "Academic Press Inc.",

}

TY - JOUR

T1 - Growth, automation, and the long-run share of labor

AU - Ray, Debraj

AU - Mookherjee, Dilip

PY - 2022/10

Y1 - 2022/10

N2 - We study the long run implications of workplace automation induced by capital accumulation. We describe a minimal set of sufficient conditions for sustained growth, along with a declining labor share of income in the long run: (i) a basic asymmetry between physical and human capital; (ii) the technical possibility of automation in each sector; (ii) a self-replication condition on the production function for robot services; (iv) asymptotic homotheticity (more generally neutrality) of demand, and (v) a minimal degree of patience or intergenerational altruism among a fraction of households. However, the displacement of human labor is gradual, and absolute real wages could rise indefinitely. The results obtain in the absence of any technical progress; they extend to endogenous technical progress even if such progress is not biased ex ante in favor of automation.

AB - We study the long run implications of workplace automation induced by capital accumulation. We describe a minimal set of sufficient conditions for sustained growth, along with a declining labor share of income in the long run: (i) a basic asymmetry between physical and human capital; (ii) the technical possibility of automation in each sector; (ii) a self-replication condition on the production function for robot services; (iv) asymptotic homotheticity (more generally neutrality) of demand, and (v) a minimal degree of patience or intergenerational altruism among a fraction of households. However, the displacement of human labor is gradual, and absolute real wages could rise indefinitely. The results obtain in the absence of any technical progress; they extend to endogenous technical progress even if such progress is not biased ex ante in favor of automation.

KW - Automation

KW - Factor shares

KW - Human capital

KW - Inequality

KW - Technical progress

UR - http://www.scopus.com/inward/record.url?scp=85116753407&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85116753407&partnerID=8YFLogxK

U2 - 10.1016/j.red.2021.09.003

DO - 10.1016/j.red.2021.09.003

M3 - Article

AN - SCOPUS:85116753407

SN - 1094-2025

VL - 46

SP - 1

EP - 26

JO - Review of Economic Dynamics

JF - Review of Economic Dynamics

ER -

Growth, automation, and the long-run share of labor

Abstract

Keywords

ASJC Scopus subject areas

Access to Document

Other files and links

Fingerprint

Cite this