Working paper
The Effect of Labor Cost on Labor-Saving Innovation
SSRN
10/25/2021
DOI: 10.2139/ssrn.3946568
Abstract
We show that an increase in the cost of unskilled labor leads to more labor-saving innovation. Larger minimum wage increases are associated with larger increases in automation patent applications and citations received by automation patents. These findings are stronger in states with a higher binding wage percentile, i.e., where the minimum wage increase has more ‘bite’. The increase in automation patents following minimum wage hikes contributes to poorer employment outcomes for unskilled workers employed in routine tasks. We conclude that minimum wage legislation spurs innovation that displaces the very same workers the legislation was designed to help
Details
- Title: Subtitle
- The Effect of Labor Cost on Labor-Saving Innovation
- Creators
- Amrita Nain - University of IowaYan Wang - McMaster University
- Resource Type
- Working paper
- Publisher
- SSRN
- DOI
- 10.2139/ssrn.3946568
- Number of pages
- 70 pages
- Language
- English
- Date posted
- 10/25/2021
- Date updated
- 09/09/2023
- Academic Unit
- Finance
- Record Identifier
- 9984380610002771
Metrics
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