【Job talk】Investment Stimulus, Automation, and Skill Demand

  • 研討會日期 : 2023-01-11
  • 時間 : 14:30
  • 主講人 : Mr. Geunyong Park
  • 地點 : Conference Room B110
  • 主持人 : Professor Chun-Che Chi
  • 演講者簡介 : Mr. Park is expected to receive his Ph.D. in Economics from the University of Rochester in 2023. His research fields are Technological Change, Labor Economics, Regional Economics, and Public Economics. He is applying for a position of the Institute of Economics, Academia Sinica now.
  • 演講摘要 : This paper studies how capital investment affects labor demand in the automation process at the firm level. Using the bonus depreciation policy in the recent U.S. tax reform as an exogenous variation in capital cost, we find that the policy-driven reduction in capital cost lowers labor demand while raising capital expenditure for machinery and equipment. Using detailed information on skill and patent compositions at the firm level, we also report that the reduction in labor demand concentrates in job positions with few software skills and firms with high automation-related technologies, supporting the displacement effect of automation. We illuminate the mechanisms and welfare implications behind the empirical results by introducing a model of automation based on the task-based framework. Linking the reduced-form estimates and the model, we recover capital-labor substitution elasticity by skill and technology levels and find that the task displacement effect of capital accounts for the parameter’s heterogeneity. Our results support the public concern that automated capital could replace workers with few software skills and show that investment stimulus for machinery accelerates automation.