On the Welfare Implications of Automation

This paper establishes that the rise in the income share of information and communication technology accounts for half of the decline in labor income share in the United States. This decline can be decomposed into a sharp decline in the income shar...

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Main Authors:	Eden, Maya, Gaggl, Paul
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	SELF EMPLOYED GROWTH RATES EMPLOYMENT SOCIAL COSTS CONSUMPTION EXPENDITURES CAPITAL MARKETS CONSUMER DURABLES ECONOMIC GROWTH ACCOUNTING PRODUCTION COMMUNICATION TECHNOLOGIES CAPITAL ACCUMULATION STOCK INFORMATION TECHNOLOGY INCOME DEPRECIATION SERVICE OCCUPATIONS LABOR ALLOCATION EXCHANGE INFORMATION EXPORTS ELASTICITY ASSET MARGINAL PRODUCT NET CAPITAL DISTRIBUTION OF INCOME WELFARE OPTIMIZATION EFFECTS LABOR ECONOMICS DISTRIBUTION EQUILIBRIUM VARIABLES CAPITAL STOCK PRICE TAX INPUTS REAL WAGES RETURNS TO SCALE NOMINAL CAPITAL PAYMENTS WEALTH COMPUTER SYSTEMS RENTS ECONOMIC ANALYSIS TRENDS DRIVERS COMMUNICATIONS LABOR MARKET CAPITAL INTENSITY MARGINAL PRODUCTS INVESTMENT BEHAVIOR PRODUCTION STRUCTURE COSTS LABOR ALLOCATIONS DEVELOPMENT ECONOMICS EXTENSIVE CAPITAL GAINS CONSTANT RETURNS TO SCALE BASE YEAR PRODUCTIVITY BARRIERS TO ENTRY MARKETS NET EXPORTS ORGANIZATIONS ACCUMULATION LABOR ELASTICITY OF SUBSTITUTION CAPITAL STOCKS UTILITY INVENTORY GAINS REAL ESTATE ECONOMIC RESEARCH UNEMPLOYMENT BLUE COLLAR OCCUPATIONS INVESTORS PRODUCTIVITY GROWTH DATA AVAILABILITY CONSUMPTION FACTOR MARKETS GENERAL EQUILIBRIUM TECHNOLOGICAL CHANGE VALUE ADDED TAX INCENTIVE AGGREGATE SUPPLY CAPITAL WAGES INTERNATIONAL TRADE BARRIERS FUTURE VALUE PENSIONS COMPETITIVENESS MACROECONOMICS OCCUPATIONS EXPENDITURES INCOMES SHARE OF CAPITAL MEASUREMENT SHARES AFFILIATED ORGANIZATIONS ASSETS BENCHMARK PRODUCTION FUNCTION ECONOMICS ENDOGENOUS VARIABLES SECRETARIES OUTPUT MANAGEMENT FUNCTIONAL FORMS TRADE INVESTMENT RATES GDP GOODS INVESTOR THEORY INTANGIBLE GROWTH RATE INVESTMENT MACROECONOMIC ANALYSIS SHARE SUPPLY AFFILIATED OPTIMAL ALLOCATION SHARE CAPITAL LABOR SUPPLY TAX POLICY RETURN ON INVESTMENT COMMUNICATION DEMOGRAPHIC ARBITRAGE COMMUNICATION TECHNOLOGY LABOR MARKETS SAFETY ADVERSE EFFECTS PRICES DEVELOPMENT POLICY
Online Access:	http://documents.worldbank.org/curated/en/2015/11/25380579/welfare-implications-automation http://hdl.handle.net/10986/23453

id	okr-10986-23453
recordtype	oai_dc
spelling	okr-10986-234532021-04-23T14:04:15Z On the Welfare Implications of Automation Eden, Maya Gaggl, Paul SELF EMPLOYED GROWTH RATES EMPLOYMENT SOCIAL COSTS CONSUMPTION EXPENDITURES CAPITAL MARKETS CONSUMER DURABLES ECONOMIC GROWTH ACCOUNTING PRODUCTION COMMUNICATION TECHNOLOGIES CAPITAL ACCUMULATION STOCK INFORMATION TECHNOLOGY INCOME DEPRECIATION SERVICE OCCUPATIONS LABOR ALLOCATION EXCHANGE INFORMATION EXPORTS ELASTICITY ASSET MARGINAL PRODUCT NET CAPITAL DISTRIBUTION OF INCOME WELFARE OPTIMIZATION EFFECTS LABOR ECONOMICS DISTRIBUTION EQUILIBRIUM VARIABLES CAPITAL STOCK PRICE TAX INPUTS REAL WAGES RETURNS TO SCALE NOMINAL CAPITAL PAYMENTS WEALTH COMPUTER SYSTEMS RENTS ECONOMIC ANALYSIS TRENDS DRIVERS COMMUNICATIONS LABOR MARKET CAPITAL INTENSITY MARGINAL PRODUCTS INVESTMENT BEHAVIOR PRODUCTION STRUCTURE COSTS LABOR ALLOCATIONS DEVELOPMENT ECONOMICS EXTENSIVE CAPITAL GAINS CONSTANT RETURNS TO SCALE BASE YEAR PRODUCTIVITY BARRIERS TO ENTRY MARKETS NET EXPORTS ORGANIZATIONS ACCUMULATION LABOR ELASTICITY OF SUBSTITUTION CAPITAL STOCKS UTILITY INVENTORY GAINS REAL ESTATE ECONOMIC RESEARCH UNEMPLOYMENT BLUE COLLAR OCCUPATIONS INVESTORS PRODUCTIVITY GROWTH DATA AVAILABILITY CONSUMPTION FACTOR MARKETS GENERAL EQUILIBRIUM TECHNOLOGICAL CHANGE VALUE ADDED TAX INCENTIVE AGGREGATE SUPPLY CAPITAL WAGES INTERNATIONAL TRADE BARRIERS FUTURE VALUE PENSIONS COMPETITIVENESS MACROECONOMICS OCCUPATIONS EXPENDITURES INCOMES SHARE OF CAPITAL MEASUREMENT SHARES AFFILIATED ORGANIZATIONS ASSETS BENCHMARK PRODUCTION FUNCTION ECONOMICS ENDOGENOUS VARIABLES SECRETARIES OUTPUT MANAGEMENT FUNCTIONAL FORMS TRADE INVESTMENT RATES GDP GOODS INVESTOR THEORY INTANGIBLE GROWTH RATE INVESTMENT MACROECONOMIC ANALYSIS SHARE SUPPLY AFFILIATED OPTIMAL ALLOCATION SHARE CAPITAL LABOR SUPPLY TAX POLICY RETURN ON INVESTMENT COMMUNICATION DEMOGRAPHIC ARBITRAGE COMMUNICATION TECHNOLOGY LABOR MARKETS SAFETY ADVERSE EFFECTS PRICES DEVELOPMENT POLICY This paper establishes that the rise in the income share of information and communication technology accounts for half of the decline in labor income share in the United States. This decline can be decomposed into a sharp decline in the income share of “routine” labor—which is relatively more prone to automation—and a milder rise in the non-routine share. Quantitatively, this decomposition suggests large effects of information and communication technology on the income distribution within labor, but only moderate effects on the distribution of income between capital and labor. A production structure calibrated to match these trends suggests modest aggregate welfare gains from automation. 2015-12-18T20:21:29Z 2015-12-18T20:21:29Z 2015-11 Working Paper http://documents.worldbank.org/curated/en/2015/11/25380579/welfare-implications-automation http://hdl.handle.net/10986/23453 English en_US Policy Research Working Paper;No. 7487 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	SELF EMPLOYED GROWTH RATES EMPLOYMENT SOCIAL COSTS CONSUMPTION EXPENDITURES CAPITAL MARKETS CONSUMER DURABLES ECONOMIC GROWTH ACCOUNTING PRODUCTION COMMUNICATION TECHNOLOGIES CAPITAL ACCUMULATION STOCK INFORMATION TECHNOLOGY INCOME DEPRECIATION SERVICE OCCUPATIONS LABOR ALLOCATION EXCHANGE INFORMATION EXPORTS ELASTICITY ASSET MARGINAL PRODUCT NET CAPITAL DISTRIBUTION OF INCOME WELFARE OPTIMIZATION EFFECTS LABOR ECONOMICS DISTRIBUTION EQUILIBRIUM VARIABLES CAPITAL STOCK PRICE TAX INPUTS REAL WAGES RETURNS TO SCALE NOMINAL CAPITAL PAYMENTS WEALTH COMPUTER SYSTEMS RENTS ECONOMIC ANALYSIS TRENDS DRIVERS COMMUNICATIONS LABOR MARKET CAPITAL INTENSITY MARGINAL PRODUCTS INVESTMENT BEHAVIOR PRODUCTION STRUCTURE COSTS LABOR ALLOCATIONS DEVELOPMENT ECONOMICS EXTENSIVE CAPITAL GAINS CONSTANT RETURNS TO SCALE BASE YEAR PRODUCTIVITY BARRIERS TO ENTRY MARKETS NET EXPORTS ORGANIZATIONS ACCUMULATION LABOR ELASTICITY OF SUBSTITUTION CAPITAL STOCKS UTILITY INVENTORY GAINS REAL ESTATE ECONOMIC RESEARCH UNEMPLOYMENT BLUE COLLAR OCCUPATIONS INVESTORS PRODUCTIVITY GROWTH DATA AVAILABILITY CONSUMPTION FACTOR MARKETS GENERAL EQUILIBRIUM TECHNOLOGICAL CHANGE VALUE ADDED TAX INCENTIVE AGGREGATE SUPPLY CAPITAL WAGES INTERNATIONAL TRADE BARRIERS FUTURE VALUE PENSIONS COMPETITIVENESS MACROECONOMICS OCCUPATIONS EXPENDITURES INCOMES SHARE OF CAPITAL MEASUREMENT SHARES AFFILIATED ORGANIZATIONS ASSETS BENCHMARK PRODUCTION FUNCTION ECONOMICS ENDOGENOUS VARIABLES SECRETARIES OUTPUT MANAGEMENT FUNCTIONAL FORMS TRADE INVESTMENT RATES GDP GOODS INVESTOR THEORY INTANGIBLE GROWTH RATE INVESTMENT MACROECONOMIC ANALYSIS SHARE SUPPLY AFFILIATED OPTIMAL ALLOCATION SHARE CAPITAL LABOR SUPPLY TAX POLICY RETURN ON INVESTMENT COMMUNICATION DEMOGRAPHIC ARBITRAGE COMMUNICATION TECHNOLOGY LABOR MARKETS SAFETY ADVERSE EFFECTS PRICES DEVELOPMENT POLICY
spellingShingle	SELF EMPLOYED GROWTH RATES EMPLOYMENT SOCIAL COSTS CONSUMPTION EXPENDITURES CAPITAL MARKETS CONSUMER DURABLES ECONOMIC GROWTH ACCOUNTING PRODUCTION COMMUNICATION TECHNOLOGIES CAPITAL ACCUMULATION STOCK INFORMATION TECHNOLOGY INCOME DEPRECIATION SERVICE OCCUPATIONS LABOR ALLOCATION EXCHANGE INFORMATION EXPORTS ELASTICITY ASSET MARGINAL PRODUCT NET CAPITAL DISTRIBUTION OF INCOME WELFARE OPTIMIZATION EFFECTS LABOR ECONOMICS DISTRIBUTION EQUILIBRIUM VARIABLES CAPITAL STOCK PRICE TAX INPUTS REAL WAGES RETURNS TO SCALE NOMINAL CAPITAL PAYMENTS WEALTH COMPUTER SYSTEMS RENTS ECONOMIC ANALYSIS TRENDS DRIVERS COMMUNICATIONS LABOR MARKET CAPITAL INTENSITY MARGINAL PRODUCTS INVESTMENT BEHAVIOR PRODUCTION STRUCTURE COSTS LABOR ALLOCATIONS DEVELOPMENT ECONOMICS EXTENSIVE CAPITAL GAINS CONSTANT RETURNS TO SCALE BASE YEAR PRODUCTIVITY BARRIERS TO ENTRY MARKETS NET EXPORTS ORGANIZATIONS ACCUMULATION LABOR ELASTICITY OF SUBSTITUTION CAPITAL STOCKS UTILITY INVENTORY GAINS REAL ESTATE ECONOMIC RESEARCH UNEMPLOYMENT BLUE COLLAR OCCUPATIONS INVESTORS PRODUCTIVITY GROWTH DATA AVAILABILITY CONSUMPTION FACTOR MARKETS GENERAL EQUILIBRIUM TECHNOLOGICAL CHANGE VALUE ADDED TAX INCENTIVE AGGREGATE SUPPLY CAPITAL WAGES INTERNATIONAL TRADE BARRIERS FUTURE VALUE PENSIONS COMPETITIVENESS MACROECONOMICS OCCUPATIONS EXPENDITURES INCOMES SHARE OF CAPITAL MEASUREMENT SHARES AFFILIATED ORGANIZATIONS ASSETS BENCHMARK PRODUCTION FUNCTION ECONOMICS ENDOGENOUS VARIABLES SECRETARIES OUTPUT MANAGEMENT FUNCTIONAL FORMS TRADE INVESTMENT RATES GDP GOODS INVESTOR THEORY INTANGIBLE GROWTH RATE INVESTMENT MACROECONOMIC ANALYSIS SHARE SUPPLY AFFILIATED OPTIMAL ALLOCATION SHARE CAPITAL LABOR SUPPLY TAX POLICY RETURN ON INVESTMENT COMMUNICATION DEMOGRAPHIC ARBITRAGE COMMUNICATION TECHNOLOGY LABOR MARKETS SAFETY ADVERSE EFFECTS PRICES DEVELOPMENT POLICY Eden, Maya Gaggl, Paul On the Welfare Implications of Automation
relation	Policy Research Working Paper;No. 7487
description	This paper establishes that the rise in the income share of information and communication technology accounts for half of the decline in labor income share in the United States. This decline can be decomposed into a sharp decline in the income share of “routine” labor—which is relatively more prone to automation—and a milder rise in the non-routine share. Quantitatively, this decomposition suggests large effects of information and communication technology on the income distribution within labor, but only moderate effects on the distribution of income between capital and labor. A production structure calibrated to match these trends suggests modest aggregate welfare gains from automation.
format	Working Paper
author	Eden, Maya Gaggl, Paul
author_facet	Eden, Maya Gaggl, Paul
author_sort	Eden, Maya
title	On the Welfare Implications of Automation
title_short	On the Welfare Implications of Automation
title_full	On the Welfare Implications of Automation
title_fullStr	On the Welfare Implications of Automation
title_full_unstemmed	On the Welfare Implications of Automation
title_sort	on the welfare implications of automation
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/11/25380579/welfare-implications-automation http://hdl.handle.net/10986/23453
_version_	1764453883641331712

On the Welfare Implications of Automation

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