The Changing Economics of Knowledge Production

45 Pages Posted: 1 May 2020 Last revised: 25 Oct 2021

See all articles by Simona Abis

Simona Abis

Columbia University - Columbia Business School

Laura Veldkamp

Columbia University - Columbia Business School; National Bureau of Economic Research (NBER)

Date Written: April 6, 2020

Abstract

Big data technologies change the way in which data and human labor combine to create knowledge. Is this a modest technological advance or a data revolution? Using hiring and wage data, we show how to estimate firms' data stocks and the shape of their knowledge production functions. Knowing how much production functions have changed informs us about the likely long-run changes in output, in factor shares, and in the distribution of income, due to the new, big data technologies. Using data from the investment management industry, our structural estimates predict that the labor share of income in knowledge work may fall by 5%. The change associated with big data technologies is similar in magnitude to estimates of the change brought on by the industrial revolution.

Keywords: FinTech, Machine Learning, Artificial Intelligence, Big Data, Labor Share, Investment Management

JEL Classification: E23, E25, G10, G23

Suggested Citation

Abis, Simona and Veldkamp, Laura, The Changing Economics of Knowledge Production (April 6, 2020). Available at SSRN: https://ssrn.com/abstract=3570130 or http://dx.doi.org/10.2139/ssrn.3570130

Simona Abis (Contact Author)

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

HOME PAGE: http://https://www8.gsb.columbia.edu/cbs-directory/detail/sa3518

Laura Veldkamp

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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