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Does Automation Technology increase Wage?

Author

Listed:
  • Ryosuke Shimizu

    (Aoyama Gakuin University)

  • Shohei Momoda

    (Kyoto University)

Abstract

This paper examines the relationship between automation technology diffusion and the wage. In this model, producers either choose automation or nonautomation technology, whichever is more profitable. When they introduce the automation technology, they have to pay fixed costs, which are different between industries. The main results of this paper are that the productivity improvement of automation technology, which promotes automation diffusion, decreases labor share, and this improvement also decreases the wage when the level of automation technology diffusion is high enough.

Suggested Citation

  • Ryosuke Shimizu & Shohei Momoda, 2020. "Does Automation Technology increase Wage?," KIER Working Papers 1039, Kyoto University, Institute of Economic Research.
    • Handle: RePEc:kyo:wpaper:1039
    as

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    File URL: http://www.kier.kyoto-u.ac.jp/DP/DP1039.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    automation; the wage; labor share decline; technology choice;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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