The makeup of jobs in the United States has undergone significant changes from 1980 to the2010’s - in terms of occupation choice, wage structure and geography. Many of these changeshave been attributed to low-frequency trends in production technology, market structure,and global demand. In these essays, we investigate three types of low-frequency changes inlabor demand, and provide theoretical models, as well as empirical evidence, of how theyare dynamically causing adjustments in the US labor market.In the first essay, we study the effects of technological changes that can substitute for;;routine” task intensive occupations on unemployment spells. Constructing and estimatinga search and matching model of unemployment, we find that the rate of unemployed workersfrom routine occupations who search for routine jobs has increased from 1990-2012. In thesame time period, the rate of technological mismatch between these unemployed workers androutine job vacancies has nearly doubled. Post mismatch, the rate of labor force exit hasrisen for males in the goods-producing sector since the mid 1990’s. These results suggest thatthere are considerable adjustment costs for unemployed labor from technological change.In the second essay, we investigate if automation technologies have caused rising marketshares by the largest firms in the US, and the impacts on the labor share of aggregate income.We construct a model where automation technologies are made available to a small number offirms within industries, and analyze partial and general equilibrium effects on factor shares.We find that the rise of ;;superstar firms” may cause a rise in the share of income accruingto owners/shareholders at the expense of traditional labor and capital inputs at first, butthat the labor share should eventually increase as long as labor remains essential to theproduction process.In the third essay, we explore the implications of large firm entry on county wage and employment outcomes up to ten years after initial entry. Constructing a spatial equilibriummodel of large firm entry into local labor markets, we decompose the effects of large firmentry into agglomeration effects, where the new large firm causes further entry of firms intothe county for greater productivity benefits, and crowding out effects, where the large firmpushes existing firms to exit the county due to new higher wages. Estimating the model ona sample of counties with large establishment entry form 1990-2005, we find that for mostindustries, crowding out effects slightly outweigh the agglomeration effects, and large firmentry has a small net negative effect on county employment growth. Entry of manufacturingand services establishments result in lower crowding out effects and thus produce betteremployment growth outcomes than other industries.
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