Dissertation/Thesis Abstract

Essays on Labor Share
by Cho, Il Hyun, Ph.D., University of California, Davis, 2017, 145; 10285721
Abstract (Summary)

In this dissertation, I present three essays on labor share.

The first chapter studies the effect of offshoring on the relative share of income going to labor and capital. It introduces offshoring in a model of heterogeneous firms with two intermediate inputs. The intermediate inputs are produced with a CES technology using two factors of production: labor and capital. Given the direction of labor-saving technical change, offshoring decreases the relative demand for labor, which thereby decreases labor share. Empirical studies of the World Input-Output Database (WIOD) show that in manufacturing industries in developed countries, the share of imported intermediate inputs, especially those that originate in developing countries, negatively affects labor share.

The second chapter studies the effect of trade liberalization on labor share. It introduces technology upgrading in a model of trade in which heterogeneous firms use two inputs: labor and capital. The model allows for non-neutral technology upgrading and it uses a CES production function. The joint treatment of technology upgrading and export choices shows that trade liberalization can induce efficient firms to upgrade their technology. Given the direction of labor-saving technology upgrading, trade liberalization increases the relative demand for capital and decreases labor share. This model also explains why exporting firms are more capital intensive.

The third chapter studies the effect of ICT use on the labor share in South Korean firms employing Workplace Panel Survey (WPS). The results robustly show that increasing ICT use decreases labor share in both manufacturing firms and non-manufacturing firms. It also finds that the decreasing the bargaining position of labor negatively affects labor share.

Indexing (document details)
Advisor: Swenson, Deborah L.
Commitee: Feenstra, Robert C., Peri, Giovanni, Taylor, Alan M.
School: University of California, Davis
Department: Economics
School Location: United States -- California
Source: DAI-A 79/01(E), Dissertation Abstracts International
Source Type: DISSERTATION
Subjects: Economics
Keywords: Ict, Labor share, Offshoring, Technology upgrading, Trade liberalization
Publication Number: 10285721
ISBN: 9780355151770
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