scholarly journals A Decline in Labor's Share with Capital Accumulation and Complementary Factor Inputs: An Application of the Morishima Elasticity of Substitution

2019 ◽  
Author(s):  
Saumik Paul
Keyword(s):  
Capital Accumulation ◽  
Elasticity Of Substitution ◽  
Complementary Factor ◽  
Labor's Share ◽  
Morishima Elasticity ◽  
Factor Inputs

scholarly journals Micro Data and Macro Technology

Econometrica ◽  
2021 ◽  
Vol 89 (2) ◽  
pp. 703-732
Author(s):  
Ezra Oberfield ◽  
Devesh Raval
Keyword(s):  
Cross Section ◽  
Technical Change ◽  
Capital Accumulation ◽  
Manufacturing Sector ◽  
Elasticity Of Substitution ◽  
Relative Importance ◽  
Micro Data ◽  
The Cross ◽  
Labor's Share ◽  
The U.S

We develop a framework to estimate the aggregate capital‐labor elasticity of substitution by aggregating the actions of individual plants. The aggregate elasticity reflects substitution within plants and reallocation across plants; the extent of heterogeneity in capital intensities determines their relative importance. We use micro data on the cross‐section of plants to build up to the aggregate elasticity at a point in time. Interpreting our econometric estimates through the lens of several different models, we find that the aggregate elasticity for the U.S. manufacturing sector is in the range of 0.5–0.7, and has declined slightly since 1970. We use our estimates to measure the bias of technical change and assess the decline in labor's share of income in the U.S. manufacturing sector. Mechanisms that rely on changes in the relative supply of factors, such as an acceleration of capital accumulation, cannot account for the decline.

scholarly journals Nonconvexities, Retirement, and the Elasticity of Labor Supply

2013 ◽  
Vol 103 (4) ◽  
pp. 1445-1462 ◽  
Author(s):  
Richard Rogerson ◽  
Johanna Wallenius
Keyword(s):  
Human Capital ◽  
Life Cycle ◽  
Labor Supply ◽  
Capital Accumulation ◽  
Credit Constraints ◽  
Elasticity Of Substitution ◽  
Human Capital Accumulation ◽  
Hours Worked ◽  
Younger Workers ◽  
Life Cycle Models

We consider two life cycle models of labor supply that use nonconvexities to generate retirement. In each case we derive a link between hours worked prior to retirement, the intertemporal elasticity of substitution for labor (IES), and the size of the nonconvexities. This link is robust to allowing for credit constraints and human capital accumulation by younger workers and suggests values for the IES that are .75 or higher. (JEL D91, J22, J24, J26)

CONSTANT-ELASTICITY-OF-SUBSTITUTION PRODUCTION FUNCTION

2008 ◽  
Vol 12 (5) ◽  
pp. 694-701 ◽  
Author(s):  
Hideki Nakamura ◽  
Masakatsu Nakamura
Keyword(s):  
Production Function ◽  
Capital Accumulation ◽  
Specific Form ◽  
Production Functions ◽  
Elasticity Of Substitution ◽  
Intermediate Goods ◽  
Constant Elasticity ◽  
Constant Elasticity Of Substitution ◽  
Douglas Production Function

We consider endogenous changes of inputs from labor to capital in the production of intermediate goods, i.e., a form of mechanization. We derive complementary relationships between capital accumulation and mechanization by assuming a Cobb–Douglas production function for the production of final goods from intermediate goods. A constant-elasticity-of-substitution production function in which the elasticity of substitution exceeds unity can be endogenously derived as the envelope of Cobb–Douglas production functions when the efficiency of inputs is assumed in a specific form. The difficulty of mechanization represents the elasticity of substitution.

scholarly journals An Analysis of the Cost Structure of Food Industries in Pakistan: An Application of the Translog Cost Function

2020 ◽  
Vol 25 (2) ◽  
pp. 1-22
Author(s):  
Sajid Hussain ◽  
Uzma Nisar ◽  
Waseem Akram
Keyword(s):  
Cost Function ◽  
Price Elasticity ◽  
Economies Of Scale ◽  
Elasticity Of Substitution ◽  
Translog Cost Function ◽  
Food Industries ◽  
Output Elasticity ◽  
Cross Price Elasticity ◽  
The Cost ◽  
Factor Inputs

Given the importance of food industriesin Pakistan, this studyanalyzestheircost structure by estimating thetranscendental logarithmic cost function. The study also considers elasticity of substitution along with own-price elasticity and cross-price elasticity. Four factor inputs,i.e.,labor, capital, energy,and materials,are used toestimatethe cost function. The results indicate that materialsaccount for the highest share of the cost. The elasticity of substitution of materialsfor capital and energy is also weak. The own-price elasticities indicate that the demand for materialsis least responsive to a change in its own price while the demand for other inputs varies with price. The cross-priceelasticities show that labor, capital and energy are substitutes foreach other. The output elasticity of cost demonstrates the presence of economies of scale.

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.

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