[2023학년도 1학기]

경제학부 특강(세미나) 2차

– 일시 : 3월 30일(월) 12시~13시

– 장소 : 미래관 906호

– 주제 : Is Software Eating the World?

– 연사 : 경희대학교 엄상민 교수님

– 논문 정보

Title:   Is Software Eating the World?

Authors:   Sangmin Aum (Kyung Hee U) and Yongseok Shin (Washington U in St.Louis)

Abstract

There is a new macro vs. micro elasticity discord. To explain the declining labor income share in most advanced economies, the macro literature finds that the elasticity of substitution between capital and labor is greater than one. However, the vast majority of micro-level estimates show that capital and labor are complements (elasticity less than one). Using firm- and establishment-level data from Korea, we divide capital into equipment and software. Our estimation shows that equipment and labor are complements (elasticity 0.5), consistent with other micro-level estimates, but software and labor are substitutes (1.7), a novel finding that helps reconcile the macro vs. micro elasticity discord. As the quality of software improves, the labor share falls within firms because of factor substitution and rising markups. In addition, production reallocates to those firms that use software more intensively, as they become effectively more productive. It turns out these firms have higher markups and lower labor shares in the data. As a result, the reallocation further reduces the aggregate labor share, with the markup channel playing a quantitatively dominant role. Software, not equipment capital, is the key to the decline of the labor income share.