CEF.UP – WiP Seminar/Webinar

Tuesday – January 25^th, 2022 at 1:00 p.m. | Room 305 | Online

“Firm-level Labor Shares and Technology-driven Occupational Changes”.

Ana Oliveira – FEP

Abstract:

Technological advances have decreased labor demand for occupations with high routine task content and increased it for occupations that are either cognitively complex or require non-repetitive social interactions. Technology has also been one of the key drivers of the changes in the labor share of income. Our paper investigates whether the evolution of occupational employment shares and occupation-specific wage rates explains firm-level labor share dynamics. Using rich administrative data for Portugal, we show that the S-shaped dynamics of the aggregate labor share between 2004 and 2019 are mostly driven by changes in firms’ labor share rather than value-added reallocation across the labor share distribution. Our findings suggest that firm-specific labor shares rise due to positive growth in hourly wages, particularly high among Routine Manual and Non-Routine Manual occupations. We also show that changes in task group employment shares have limited effects on the firm-level labor shares, due to the stabilization of occupational employment shares since 2010.