Big data technologies change the way in which data and human labor combine to create knowledge. Is this a modest technological advance or a data revolution? Using hiring and wage data, we show how to 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 structural estimates predict that the labor share of income in knowledge work may fall by 5%. The change associated with big data technologies is similar in magnitude to estimates of the change brought on by the industrial revolution.
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