Data and Code for "Automation, Bargaining Power, and Labor Market Fluctuations"

Principal Investigator(s):  View help for Principal Investigator(s) Zheng Liu, Federal Reserve Bank of San Francisco; Sylvain Leduc, Federal Reserve Bank of San Francisco

Version:  View help for Version V2

Name File Type Size Last Modified
  Replication Files-for-Leduc-Liu-AEJMacro 12/21/2023 11:57:AM

Project Citation: 

Liu, Zheng, and Leduc, Sylvain. Data and Code for “Automation, Bargaining Power, and Labor Market Fluctuations.” Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-08-27. https://doi.org/10.3886/E193242V2

Project Description

Summary:  View help for Summary We argue that the threat of automation weakens workers' bargaining power in wage negotiations, dampening wage adjustments and amplifying unemployment fluctuations. We make this argument based on a business cycle model with labor market search frictions, generalized to incorporate automation decisions.  In the model, procyclical automation threats create endogenous real wage rigidity that amplifies labor market fluctuations. The automation mechanism is consistent with empirical evidence. It is also quantitatively important for explaining the large volatilities of unemployment and vacancies relative to that of real wages, a puzzling observation through the lens of standard business cycle models.
Funding Sources:  View help for Funding Sources Federal Reserve Bank of San Francisco; Federal Reserve Bank of San Francisco

Scope of Project

Subject Terms:  View help for Subject Terms Automation; bargaining power; unemployment; wages; productivity; labor share; business cycles
JEL Classification:  View help for JEL Classification
      E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
      J64 Unemployment: Models, Duration, Incidence, and Job Search
      O33 Technological Change: Choices and Consequences; Diffusion Processes
Data Type(s):  View help for Data Type(s) aggregate data; program source code

Methodology

Data Source:  View help for Data Source US Bureau of Labor Statistics
Job Openings and Labor Turnover Survey (JOLTS)
US Bureau of Economic Analysis
International Federation of Robotics

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Published Versions

V2 [2024-08-27]

V1 [2023-08-10]

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