capital labour and justice - technology and jobs

Question 1

what occured with technology and jobs during the 20th century?

Answer 1

during the 20th century of unprecendented technological advancements in transportation and production and communication, labours shar of national income remained roughly constant

Question 2

what occurs with technology and jobs during the 21 st century?

Answer 2

labours share of income has fallen in many nations

Question 3

what are the two direct effects that a new technology can have on labour?

Answer 3

labour augmenting: a new technology makes workers more productive and increases the demand for labour
or
labour displacing: a new technology replaces the need for workers and capital takes over decreasing the demand for labour

Question 4

what are the indirect effects of new technology on laboue?

Answer 4

compensation effects: due to increases in productivity we see an increase in demand for labour from other industries

Question 5

what is the constant elasticity if substitution production function?

Answer 5

Y= [(A^k *K)^p + (A^L *L)^p]^1/p
production Y is produced by capital K and labour L
A^K and A^L are factor augmenting technologies associated with capital and labour respectively
p is the elasticity of substitution

Question 6

what occurs if the elasticity of substitution p is greater than 0 fir the constant elasticity substitution production function?

Answer 6

the capital and labour are gross substitutes

Question 7

what occurs if the elasticity of substitution p is less than 0 fir the constant elasticity substitution production function?

Answer 7

if p is less than 0 then capital and labour are gross compliments

Question 8

what occurs if the elasticity of substitution p is equal to 0 fir the constant elasticity substitution production function?

Answer 8

you get a traditional cobb douglas with fixed shares to labour are capital

Question 9

what would the effect of an increase in A^K on the realtive price of capital to labour?

Answer 9

it would increase the relative price of capital to labour. it can be seen as an increase in inequality between owners of capital and labour. however both r and w will increase due to capital and labour being q complements- an increase in the rate of use of one capital raises the marginal product of the other and thus increases wages

Question 10

what is the effect of automation?

Answer 10

automation via robots directely displaces an indivuals job or task

Question 11

what ist he productivity effect of automation?

Answer 11

the productivity effect of automation is by allowing a more flexible allocation, automation contributers to the demand for labour in non automated tasks. the introduction of ATMS increased employment of bank tellers. this reduced cost of banking and increased branches where bank tellers specialised in tasks ATMs could not do

Question 12

what is the reinstatement effect of automation?

Answer 12

labour can be reinstated to a broader range of tasks
for example although software and computers have replaced labour in white collar tasks, they have simultaneously created many new tasks. employment growth over 1980 to 2015 took place in occupations in which job titles or tasks performed by workers changed

Question 13

what is the effect of factor augmenting technologies on labour demand?

Answer 13

effect of factor augmenting technologies on labour demand is equal to the productivity effect + substitution effect

Question 14

what is the effect of new tasks on labour demand?

Answer 14

effect of new tasks on labour demand = productivity effect + reinstatement effect

Question 15

what is the effect of automation on labour demand ?

Answer 15

effect of automation on labour demand = productivity effect +displacement effect

Question 16

what is the engels pause?

Answer 16

for the first 80 years after the start of the industrial revolution, the labour share fell, even as technological advances and productivity growth were growing

Question 17

how might AI differ from robots?

Answer 17

AI may replace more complex tasks associated with innovation and creativity whereas robots have traditionally replaced routing boring tasks

Question 18

what is the effect of automation on inequality?

Answer 18

automation may increase inequality as it tends to benefit capital over labour
for low and medium skilled workers, automation has reduced wages
wages decline in areas most exposed to one specific type of automation, the introduction of industrial robots in manufacturing

Question 19

why might AI reduce inequality?

Answer 19

it may reduce inequality by making expertise available to the non elites

Question 20

what would prevent a Sci fi dystopia where the displacement effect completely dominates?

Answer 20

one proposed solution is a soverign wealth fund, a state owned investment funds, this would act as insurance against the labour share of income falling