UC Davis

Numerous nations are grappling with the challenges posed by aging populations, a situation that has sharpened my interest in exploring immigration, robot innovation, and human innovation as potential mitigating strategies. The inaugural chapter of my dissertation addresses the issue of population decline in South Korea, proposing increased immigration as a viable remedy. Nonetheless, this proposition often encounters opposition from local workers, who argue that foreign laborers encroach upon their employment opportunities. In response, I posited that if local workers were sufficiently available to occupy vacant positions, the number of open jobs would not escalate following a exogenous diminution in foreign labor.

To substantiate this hypothesis, I utilized the COVID-19 pandemic as a natural experiment. The government's rigorous quarantine protocols, which curbed the influx of temporary foreign labor, furnished an unprecedented context for this study. By employing a shift-share instrument and conducting a continuous difference-in-differences analysis, I sought to establish causality. The abrupt decrease in foreign labor, independent of job vacancies, constituted the `shift' component of my instrument. Meanwhile, the pre-pandemic distribution of these foreign workers across different manufacturing sectors, also unrelated to the pandemic, served as the `share' aspect. The findings from the first chapter reveal a sustained increase in job vacancies over two years, especially in industries that formerly depended on temporary foreign labor, highlighting the challenge firms faced in securing full-time employees.

In the second chapter, instead of investigating whether robotic and human innovations address the issue of a shrinking population, I concentrate on how these innovations impact the global labor share. Understanding this effect on the labor share will provide essential insights for future research on the shrinking population problem.

Through a general equilibrium model distinguishing between robot and non-robot capital, the the second chapter uncovers two primary mechanisms by which robots influence labor share: through automation and the reduction in robot prices, both of which exert a negative effect on labor share. This chapter also pioneers in empirically evaluating how innovation in human tasks affects labor share, finding that its positive effects surpass the negative consequences of automation.

In the third chapter, I broaden the analysis of the labor share to include factors beyond robotic and human innovations. The United States has experienced a marked decline in labor share ---a trend that I attribute to increasing market concentration, as outlined by Autor et al.(2020). This chapter investigates whether this phenomenon is confined to the United States or is also evident in European Union countries. My analysis indicates that market concentration did not occur in the EU, and the correlation between market concentration and labor share is insignificant. This demonstrates that the surge in market concentration, leading to a decrease in labor share, is predominantly a phenomenon specific to the United States and does not extend to European Union countries.

The findings of the third chapter suggest that, unlike in the United States, the impact of market concentration in Europe is minimal. This implies that robots and human innovation have a more pronounced effect on the labor share than market concentration. These insights contribute to a deeper understanding of the determinants of changes in the global labor share and indirectly support the exploration of future research directions, particularly whether robots and human innovation can address the challenges of a shrinking population.