The impact of Moore’s law on productivity slowdown and the labor share

Abstract

Using data from a large scale technology survey, we study the impact of Moore’s law on productivity growth and changes in the labor share. Motivated by the fact that the ratio of computation to labor in production is rising, while both the labor and computational shares are declining, we develop a novel production function with both labor- and computation-augmenting productivity terms. Using this setup, we estimate a production function for all U.S. public firms in our survey in order to quantify the effects of computation and other IT inputs on productivity growth and the fall in the labor share.