New technology choices lead to higher long-run capital-labor substitution elasticity.
The article discusses how firms' choice of technology affects the balance between using machines and workers. The shape of the technology frontier determines how much capital and labor are used. If it's harder to switch technologies, it takes longer for the balance to change. In the long run, the balance shifts more easily. When the technology frontier is log-linear, the production function becomes like Cobb-Douglas. This means that in the long run, the way machines and workers are used becomes more predictable. The researchers used a model to show that their approach matches well with how the U.S. labor market behaves in the short and medium term.