Does Growth Lead to Labor Reallocation? Role of Own-Product Improvement vs. Product Expansion [paper] [online appendix]
*Supersedes 'Growth and Labor Reallocation: Vertical versus Horizontal Innovation'
I study the relationship between long-run growth and labor reallocation when incumbent producers both innovate over their previous products (own-product improvements) and expand to new product markets (product expansion). I calibrate a quality ladder model of endogenous growth with an establishment panel survey data that distinguish different innovation types. I discover that own-product improvements account for 90% of productivity growth and 81% of the welfare gains from faster growth after R&D incentives. Since own-product improvements have smaller effects to reallocate labor between establishments, despite an increase in growth rates, labor reallocation rates barely change in response to R&D incentives.
How Task-Biased is Capital-Embodied Innovation? [paper] joint with Younghun Shim
*Supersedes 'Innovation on Tools and the Rise of Skill Premium'
This paper develops a measure of Capital-Embodied Innovation (CEI). The measure counts the number of patents applied to capital goods by matching patent documents with Wikipedia articles on capital goods. Using occupation-level variations on the sets of capital goods from O*NET, we document that CEI is biased toward abstract and non-routine occupations. Furthermore, we highlight the heterogeneous effects of CEI across the capital-occupation relationship. When the capital good performs a similar function as the occupational task (task-substituting capital), the CEI reduces the relative demand for labor. In case the capital good performs a different function than the occupation tasks (task-complementing capital), the CEI raises relative demand for labor. Abstract occupations have disproportionately more CEI on task-complementing capital than non-abstract occupations. A model-based counterfactual implies that the employment growth between the 1980s and the 2010s would be 37% less biased towards abstract-task occupations without CEI. The degree of job polarization and occupational wage inequality would have also been lower without CEI.
Work in Progress
Age Sorting in the Labor Market joint with Toshiaki Komatsu
Job Turnover and Productivity Growth
Job Values, Occupation Mobility, and Wage Inequality