About me

Musa ORAK
Ph.D. Candidate in Economics, UCLA
Researcher, Central Bank of Turkey

I will be attending the ASSA meetings in San Francisco on January 3-5, 2016.

Download CV here.

Research Interests: Macroeconomics, Labor Markets, International Economics, Monetary Policy.

Job Market Paper:

“Capital-Task Complementarity and the Decline of the US Labor Share of Income”
[Download the latest version!]

Abstract: This paper studies how changes in occupational composition of the labor force contributes to the recent decline of the US labor share of income. Following the job polarization literature and classifying labor by tasks performed, I estimate unitary elasticity between equipment capital and labor performing non-routine tasks. This implies that income loss of labor employed in routine task occupations is the main driver of the de- cline of the aggregate labor share. For a given path of technological change, decline of the labor share is larger when: (i) the substitutability between equipment capital and routine tasks is stronger, and (ii) equipment capital has a larger weight in production. Furthermore, a dynamic general equilibrium model shows that the impact of permanent technology shocks on the labor share gets smaller as the fraction of routine task labor declines. Consistent with this, the model predicts that the labor share should stabilize at around 55% in the long-run even if technological progress continues at its current pace. The model also documents that the fall in relative equipment capital prices alone can explain 72% of the decline of the labor share for the 1967-2013 period. Finally, repeating the analysis by disaggregating labor into educational groups reveals that the theory based on capital-task interactions improves on the capital-skill complementarity theory in explaining the decline of the labor share.