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Partial automation and the technology-enabled deskilling of routine jobs

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  • Downey, Mitch

Abstract

Evidence shows technology automates middle-wage occupations’ routine tasks. I argue technology only partially automates these, simplifying them so that they can be performed by less-skilled workers. Thus, post-automation costs include technology and low-wage workers to use it. The minimum wage raises these costs, lowering the profitability of automation and slowing the adoption of routine-replacing technologies. I test this claim using new cross-state variation in the minimum wage (induced by state price differences) and new cross-industry variation in the importance of low-skilled labor for technology (measuring using the Current Population Survey Computer Use Supplement and the Dictionary of Occupational Titles). Because low-skilled workers are needed alongside technology, I show that a low minimum wage increases the automation of routine jobs.

Suggested Citation

  • Downey, Mitch, 2021. "Partial automation and the technology-enabled deskilling of routine jobs," Labour Economics, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:labeco:v:69:y:2021:i:c:s0927537121000087
    DOI: 10.1016/j.labeco.2021.101973
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    2. Bürgisser, Reto, 2023. "Policy Responses to Technological Change in the Workplace," SocArXiv kwxn2, Center for Open Science.
    3. Albinowski, Maciej & Lewandowski, Piotr, 2022. "The Impact of ICT and Robots on Labour Market Outcomes of Demographic Groups in Europe," IZA Discussion Papers 15752, Institute of Labor Economics (IZA).
    4. Chao Wu & Yu Hua, 2023. "Does Environmental Regulation Have an Employment Dividend? Evidence from China," Sustainability, MDPI, vol. 15(7), pages 1-20, April.
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    6. Julie M É Garneau & Sara Pérez-Lauzon & Christian Lévesque, 2023. "Digitalisation of work in aerospace manufacturing: expanding union frames and repertoires of action in Belgium, Canada and Denmark," Transfer: European Review of Labour and Research, , vol. 29(1), pages 139-154, February.
    7. Gregory, Terry & Zierahn, Ulrich, 2022. "When the minimum wage really bites hard: The negative spillover effect on high-skilled workers," Journal of Public Economics, Elsevier, vol. 206(C).
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    More about this item

    Keywords

    Minimum wage; Technology adoption; Automation; Wage inequality;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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