Dear colleagues,
We hereby invite you to join our next Economics
of Inequality Research Seminar at WU Vienna.
Konstantin Wacker (University of Groningen)
will present the paper
The labor share, capital-labor complementarity, and direction of the technological change.
Date and Time:
Monday, June 15; 3.00 p.m.
Location: WU Vienna,
D4.0.127.
Abstract
The share of aggregate income earned by labor has been declining in several high-income countries. This conflicts with a macroeconomic production function that is Cobb-Douglas, which
was initially motivated by Kaldor's growth fact of a constant labor share. To reconcile the aggregate production function with declining labor shares and increasing capital-output ratios, some researchers have suggested that capital can easily substitute labor.
This, in turn, contradicts the vast econometric evidence that suggests capital and labor are gross complements.
This paper introduces factor-biased technological change into a constant elasticity of substitution (CES) production function and shows how recent developments of the labor share can
be reconciled with a reasonably calibrated CES when the substitution elasticity of capital and labor is low (¦Ò ¡Ö 0.6). Empirically plausible calibration
allows me to estimate the direction of technical change. The results suggest that all technological progress in the US over the last decades was labor-saving. This supports the idea that technological change in capital-rich countries is directed towards labor
when production factors are complements..
Please register your participation
here.
Best regards,
Franziska Disslbacher
----
Franziska Disslbacher, PhD
Assistant Professor
Institute for Spatial & Social-Ecological Transformations
&
Research Institute Economics of Inequality
WU, Vienna University of Economics and Business
Welthandelsplatz 1, 1020 Vienna, Austria
LSE International Inequalities Institute ?C Research Fellow |
Stone Center on Socio-Economic Inequality CUNY |
SOEP / DIW ?C Associated Researcher
World Inequality Lab PSE?C Research Fellow
+43 1 313 36 6669
franziska.disslbacher@wu.ac.at