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Does automation technology increase wage?

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  • Shimizu, Ryosuke
  • Momoda, Shohei

Abstract

This paper examines the relationship between automation technology and wages. In the model, producers either choose automation or non-automation technology, whichever is more profitable. Furthermore, when producers introduce automation technology, they must pay fixed costs, which differ between industries. The main results of this paper indicate that the increased productivity of automation technology promotes automation, decreases labor income share, and also decreases wages when the level of automation diffusion is sufficiently high.

Suggested Citation

  • Shimizu, Ryosuke & Momoda, Shohei, 2023. "Does automation technology increase wage?," Journal of Macroeconomics, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:jmacro:v:77:y:2023:i:c:s0164070423000411
    DOI: 10.1016/j.jmacro.2023.103541
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    More about this item

    Keywords

    Automation; 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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