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Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model

Author

Listed:
  • Herbert Dawid

    (Bielefeld University)

  • Michael Neugart

    (Technische Universität Darmstadt)

Abstract

The advent of artificial intelligence is changing the task allocation of workers and machines in firms’ production processes with potentially wide ranging effects on workers and firms. We develop an agent-based simulation framework to investigate the consequences of different types of automation for industry output, the wage distribution, the labor share, and industry dynamics. It is shown how the competitiveness of markets, in particular barriers to entry, changes the effects that automation has on various outcome variables, and to which extent heterogeneous workers with distinct general skill endowments and heterogeneous firms featuring distinct wage offer rules affect the channels via which automation changes market outcomes.

Suggested Citation

  • Herbert Dawid & Michael Neugart, 2023. "Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model," Journal of Evolutionary Economics, Springer, vol. 33(1), pages 35-63, January.
    • Handle: RePEc:spr:joevec:v:33:y:2023:i:1:d:10.1007_s00191-022-00803-5
    DOI: 10.1007/s00191-022-00803-5
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    More about this item

    Keywords

    Automation; Artificial intelligence; Tasks; Wage inequality; Firm dynamics;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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