The Changing Economics of Knowledge Production

35 Pages Posted: 1 May 2020

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 transformation of our basic economic processes? Using hiring and wage data from the financial sector, we 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 results suggest that the labor share of income in knowledge work may fall from 44% to 27% and we quantify the corresponding increase in the value of data.

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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