Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232702 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13950
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper proposes a basic model with two types of capital: productive capital directly involved in the production process and capital devoted to monitoring workers. Surveillance capital intensifies workers' job strain, while wage recognition encourages their engagement. Firms face a double trade-off between the two types of capital and between incentives and labour costs. Under simple assumptions, up to a certain threshold, technological innovation improves productivity, wages and profits at the same pace, leading to a at labour share in income. Then, once the threshold is breached, profit-maximization initiates a transfer from productive capital to monitoring tools. This progressive shift generates a decline in the labour share and a productivity slowdown, despite greater job strain. The model suggests the possibility of a third phase in which productivity and wages recover.
Subjects: 
declining labour share
productivity slowdown
effort-reward imbalances
surveillance
JEL: 
O33
O40
J20
J30
Document Type: 
Working Paper

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