Knesl (2019)

Knesl, Jiri. Essays on labor and technology in asset pricing. PhD Thesis (The University of British Columbia), July 2019.

LK comment: Consists of three essays discussing the interaction of labor market, technology shocks, and capital markets.

The first essay presents the author’s theory in which “firms with high share of displaceable labor are negatively exposed to such technology shocks due to competition that makes technology adoption appear profitable but in equilibrium erodes the expected profits. Empirically I develop a firm-level measure of displaceable labor share, based on detailed classifications from the O*NET database, and find that firms with high displaceable labor share have negative exposure to technology shocks…. I further show that firms with negative exposure to these technology shocks earn a 4% per year return premium.”

The second examines how “different investment shocks affect different types of labor: “I show that technology shocks are an important source of job displacement and labor income risk.”

The third “examines how a firm’s capital intensity can affect the measurement of firm’s exposure to investment shocks by a popular measure, the IMC portfolio. I show that this measure suggests a considerable premium for an exposure to investment shocks when applied in a sample of capital-intensive firms but almost no premium for the same exposure when applied to the labor-intensive sample. I extend a model from the previous literature by capital intensity to provide a possible explanation.”

Link: https://open.library.ubc.ca/cIRcle/collections/ubctheses/24/items/1.0379796