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Research papers on Automation and the labor market

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  1. Automation and New Tasks: How Technology Displaces and Reinstates Labor

    Daron Acemoğlu, Pascual Restrepo · 2019 · The Journal of Economic Perspectives · 2,441 citations

    We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which lab

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  2. Skills, Tasks and Technologies: Implications for Employment and Earnings

    Daron Acemoğlu, David Autor · 2010 · National Bureau of Economic Research · 2,201 citations

    A central organizing framework of the voluminous recent literature studying changes in the returns to skills and the evolution of earnings inequality is what we refer to as the canonical model, which elegantly and powerfully operationalizes the supply and demand for skills by assuming two distinct skill groups that perform two different and imperfectly substitutable tasks or produce two imperfectly substitutable goods. Technology is assumed to take a factor-augmenting form, which, by complementing either high or low skill workers, can generate skill biased demand shifts. In this paper, we argue that despite its notable successes, the canonical model is largely silent on a number of central e

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  3. Robots at Work

    Georg Graetz, Guy Michaels · 2018 · The Review of Economics and Statistics · 1,944 citations

    We analyze for the first time the economic contributions of modern industrial robots, which are flexible, versatile, and autonomous machines. We use novel panel data on robot adoption within industries in seventeen countries from 1993 to 2007 and new instrumental variables that rely on robots’ comparative advantage in specific tasks. Our findings suggest that increased robot use contributed approximately 0.36 percentage points to annual labor productivity growth, while at the same time raising total factor productivity and lowering output prices. Our estimates also suggest that robots did not significantly reduce total employment, although they did reduce low-skilled workers’ employment shar

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  4. The Growing Importance of Social Skills in the Labor Market*

    David Deming · 2017 · The Quarterly Journal of Economics · 1,671 citations

    Abstract The labor market increasingly rewards social skills. Between 1980 and 2012, jobs requiring high levels of social interaction grew by nearly 12 percentage points as a share of the U.S. labor force. Math-intensive but less social jobs—including many STEM occupations—shrank by 3.3 percentage points over the same period. Employment and wage growth were particularly strong for jobs requiring high levels of both math skill and social skills. To understand these patterns, I develop a model of team production where workers “trade tasks” to exploit their comparative advantage. In the model, social skills reduce coordination costs, allowing workers to specialize and work together more efficie

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  5. Robots and Jobs: Evidence from US Labor Markets

    Daron Acemoğlu, Pascual Restrepo · 2017 · National Bureau of Economic Research · 910 citations

    As robots and other computer-assisted technologies take over tasks previously performed by labor, there is increasing concern about the future of jobs and wages.We analyze the effect of the increase in industrial robot usage between 1990 and 2007 on US local labor markets.Using a model in which robots compete against human labor in the production of different tasks, we show that robots may reduce employment and wages, and that the local labor market effects of robots can be estimated by regressing the change in employment and wages on the exposure to robots in each local labor market-defined from the national penetration of robots into each industry and the local distribution of employment a

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  6. Artificial Intelligence, Automation and Work

    Daron Acemoğlu, Pascual Restrepo · 2018 · National Bureau of Economic Research · 700 citations

    We summarize a framework for the study of the implications of automation and AI on the demand for labor, wages, and employment. Our task-based framework emphasizes the displacement effect that automation creates as machines and AI replace labor in tasks that it used to perform. This displacement effect tends to reduce the demand for labor and wages. But it is counteracted by a productivity effect, resulting from the cost savings generated by automation, which increase the demand for labor in non-automated tasks. The productivity effect is complemented by additional capital accumulation and the deepening of automation (improvements of existing machinery), both of which further increase the de

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  7. The Adjustment of Labor Markets to Robots

    Wolfgang Dauth, Sebastian Findeisen, Jens Suedekum, et al. · 2021 · Journal of the European Economic Association · 538 citations

    Abstract We use detailed administrative data to study the adjustment of local labor markets to industrial robots in Germany. Robot exposure, as predicted by a shift-share variable, is associated with displacement effects in manufacturing, but those are fully offset by new jobs in services. The incidence mostly falls on young workers just entering the labor force. Automation is related to more stable employment within firms for incumbents, and this is driven by workers taking over new tasks in their original plants. Several measures indicate that those new jobs are of higher quality than the previous ones. Young workers also adapt their educational choices, and substitute away from vocational

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  8. The Impact of Artificial Intelligence on the Labor Market

    Michael Webb · 2019 · Economics of Innovation eJournal · 487 citations

    I develop a new method to predict the impacts of a technology on occupations. I use the overlap between the text of job task descriptions and the text of patents to construct a measure of the exposure of tasks to automation. I first apply the method to historical cases such as software and industrial robots. I establish that occupations I measure as highly exposed to previous automation technologies saw declines in employment and wages over the relevant periods. I use the fitted parameters from the case studies to predict the impacts of artificial intelligence. I find that, in contrast to software and robots, AI is directed at high-skilled tasks. Under the assumption that the historical patt

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  9. Is Automation Labor-Displacing? Productivity Growth, Employment, and the Labor Share

    David Autor, Anna Salomons · 2018 · National Bureau of Economic Research · 409 citations

    Many technological innovations replace workers with machines, but this capital-labor substitution need not reduce aggregate labor demand because it simultaneously induces four countervailing responses: own-industry output effects; cross-industry input-output effects; between-industry shifts; and final demand effects. We quantify these channels using four decades of harmonized cross-country and industry data, where we measure automation as industry-level movements in total factor productivity (TFP) that are common across countries. We find that automation displaces employment and reduces labor's share of value-added in the industries in which it originates (a direct effect). In the case of em

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  10. Is Automation Labor Share-Displacing? Productivity Growth, Employment, and the Labor Share

    David Autor, David Autor, Anna Salomons, et al. · 2018 · Brookings Papers on Economic Activity · 380 citations

    Many technological innovations replace workers with machines, but this capital-labor substitution need not reduce aggregate labor demand because it simultaneously induces four countervailing responses: own-industry output effects; cross-industry input-output effects; between-industry shifts; and final demand effects. We quantify these channels using four decades of harmonized cross-country and industry data, where we measure automation as industry-level movements in total factor productivity (TFP) that are common across countries. We find that automation displaces employment and reduces labor's share of value-added in the industries in which it originates (a direct effect). In the case of em

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  12. Industrial robots, employment growth, and labor cost: A simultaneous equation analysis

    J. Jung, Dong-Geon Lim · 2020 · Technological Forecasting and Social Change · 181 citations

    Abstract In recent years, the global rapid expansion of industrial robots has induced ever-increasing concerns for the cause and effect of such growth, particularly with regard to its relationship with labor. This paper analyzes the factors underlying the adoption of industrial robots, employment growth and structure, and labor costs, taking into account the two-way causalities between these variables. For the empirical analysis, we use the three-stage least squares (3SLS) method for the system of simultaneous equations and apply it to the panel data constructed for 42 countries. Explanatory variables for each equation include the dependent variables of other equations and exogenous variable

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  14. Adjusting to Robots: Worker-Level Evidence

    W. Dauth, S. Findeisen, Jens Suedekum, et al. · 2018 · 119 citations

    We estimate the effect of industrial robots on employment, wages, and the composition of jobs in German labor markets between 1994 and 2014. We find that the adoption of industrial robots had no effect on total employment in local labor markets specializing in industries with high robot usage. Robot adoption led to job losses in manufacturing that were offset by gains in the business service sector. We analyze the impact on individual workers and find that robot adoption has not increased the risk of displacement for incumbent manufacturing workers. They stay with their original employer, and many workers adjust by switching occupations at their original workplace. The loss of manufacturing

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  15. Automation, unemployment, and the role of labor market training

    B. Schmidpeter, R. Winter‐Ebmer · 2021 · European Economic Review · 62 citations

    Abstract We provide comprehensive evidence on the consequences of automation risk on the career of unemployed workers and the mitigating role of labor market training. Using almost two decades of administrative data for Austria, we find that a higher risk of automation reduces the job finding probability; a problem which has increased over the past years. This development is associated with increasing re-employment wages and job stability. We also present new aspects of public training in times of technological progress. Provided training counteracts the negative impact of automation on the job finding probability. Its efficiency has declined over the past years, however.

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  16. Death by Robots? Automation and Working-Age Mortality in the United States.

    R. O'Brien, E. Bair, A. Venkataramani · 2021 · Demography · 57 citations

    The decline of manufacturing employment is frequently invoked as a key cause of worsening U.S. population health trends, including rising mortality due to "deaths of despair." Increasing automation-the use of industrial robots to perform tasks previously done by human workers-is one structural force driving the decline of manufacturing jobs and wages. In this study, we examine the impact of automation on age- and sex-specific mortality. Using exogenous variation in automation to support causal inference, we find that increases in automation over the period 1993-2007 led to substantive increases in all-cause mortality for both men and women aged 45-54. Disaggregating by cause, we find evidenc

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  17. Is an Army of Robots Marching on Chinese Jobs?

    Osea Giuntella, Tianyi Wang · 2019 · SSRN Electronic Journal · 44 citations

    A handful of studies have investigated the effects of robots on workers in advanced economies. According to a recent report from the World Bank (2016), 1.8 billion jobs in developing countries are susceptible to automation. Given the inability of labor markets to adjust to rapid changes, there is a growing concern that the effect of automation and robotization in emerging economies may increase inequality and social unrest. Yet, we still know very little about the impact of robots in developing countries. In this paper we analyze the effects of exposure to industrial robots in the Chinese labor market. Using aggregate data from Chinese prefectural cities (2000-2016) and individual longitudin

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  18. Offshoring, Automation, Low-Skilled Immigration, and Labor Market Polarization

    Federico S. Mandelman, A. Zlate · 2022 · American Economic Journal: Macroeconomics · 36 citations

    We show that the observed polarization of employment toward the high- and low-skill occupations disappears when only native workers are considered. Instead, low-skilled immigration explains employment growth at the low tail of the skill distribution. Moreover, while employment rose, wages remained subdued in low-skill occupations. A data-disciplined structural model accounts for this evidence: Offshoring and automation negatively affect middle-skill occupations but enhance employment and wages for the high-skilled. Low-skill employment is sheltered from offshoring and automation, as it consists of manual, non-tradable services. However, low-skilled immigration depresses low-skill wages and e

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  19. Minimum Wages, Labor Market Institutions, and Youth Employment: A Cross-National Analysis

    David Neumark, William Wascher · 2004 · Industrial and Labor Relations Review · 32 citations

    We estimate the employment effects of changes in national minimum wages using a pooled cross-section time-series data set comprising 17 OECD countries for the period 1975-2000, focusing on the impact of cross-country differences in minimum wage systems and in other labor market institutions and policies that may either offset or amplify the effects of minimum wages. The average minimum wage effects we estimate using this sample are consistent with the view that minimum wages cause employment losses among youths. However, the evidence also suggests that the employment effects of minimum wages vary considerably across countries. In particular, disemployment effects of minimum wages appear to b

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  20. Automation, Bargaining Power, and Labor Market Fluctuations

    S. Leduc, Zheng Liu · 2024 · American Economic Journal: Macroeconomics · 29 citations

    We argue that the threat of automation weakens workers’ bargaining power in wage negotiations, dampening wage adjustments and amplifying unemployment fluctuations. We make this argument based on a business cycle model with labor market search frictions, generalized to incorporate automation decisions. In the model, procyclical automation threats create endogenous real wage rigidity that amplifies labor market fluctuations. The automation mechanism is consistent with empirical evidence. It is also quantitatively important for explaining the large volatilities of unemployment and vacancies relative to that of real wages, a puzzling observation through the lens of standard business cycle models

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  21. Who Benefits from Local Oil and Gas Employment? Labor Market Composition in the Oil and Gas Industry in Texas

    Zhengyu Cai, Karen Maguire, John V. Winters · 2019 · SSRN Electronic Journal · 22 citations

    This paper examines local labor market outcomes from an oil and gas boom in Texas. We examine two main outcomes across gender, race, and ethnicity: the probability of employment in the oil and gas industry and the log wages of workers employed outside the oil and gas industry. We find that men and women both gain employment in the oil and gas industry during booms, but such gains are much larger for men and are largest for black and Hispanic men. We also find positive income spillovers for workers in other industries that are similar in magnitude across demographic groups.

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  22. Innovation and the Labor Market: Theory, Evidence and Challenges

    Nicoletta Corrocher, Daniele Moschella, Jacopo Staccioli, et al. · 2023 · SSRN Electronic Journal · 18 citations

    This paper deals with the complex relationship between innovation and the labor market, analyzing the impact of new technological advancements on overall employment, skills, and wages. After a critical review of the extant literature and the available empirical studies, novel evidence is presented on the distribution of labor-saving automation [namely robotics and artificial intelligence (AI)], based on natural language processing of US patents. This mapping shows that both upstream high-tech providers and downstream users of new technologies—such as Boeing and Amazon—lead the underlying innovative effort.

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  24. The Local Labor Market Effects of Modern Manufacturing Capital: Evidence from France

    P. Aghion, C. Antonin, S. Bunel, et al. · 2023 · AEA Papers and Proceedings · 10 citations

    Using an event study methodology and comprehensive micro data from the French manufacturing sector, we analyze the local labor market effects of investments in modern manufacturing capital, including modern automation technologies. We estimate that commuting zones with higher investments in modern manufacturing capital and automation benefit from higher labor demand, with an increase in both local employment and wages. Our findings are consistent with a task-based model where the productivity effects of modern capital investments and automation outweigh their displacement effect.

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