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Mechanization, task assignment, and inequality

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  • Yuki, Kazuhiro

Abstract

Mechanization− the replacement by machines of humans engaged in production tasks− is a continuing process since the Industrial Revolution. As a result, humans have shifted to tasks machines cannot perform efficiently. The general trend until about the 1960s is the shift from manual tasks to analytical (cognitive) tasks, while, since the 1970s, because of the advancement of IT technologies, humans have shifted away from routine analytical tasks (such as simple information processing tasks) as well as routine manual tasks toward non-routine manual tasks in services as well as non-routine analytical tasks. Mechanization also has affected relative demands for workers of different skill levels and thus earnings levels and earnings inequality. The rising inequality has been the norm in economies with light labor market regulations, although the inequality fell in periods when the relative supply of skilled workers grew rapidly. This paper develops a task assignment model and examines how improvements of productivities of machines and an increase in the relative supply of skilled workers affect task assignment (which factors perform which tasks), earnings, earnings inequality, and aggregate output in order to understand the aforementioned long-run trend.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37754.

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Date of creation: 30 Mar 2012
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Handle: RePEc:pra:mprapa:37754

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Keywords: mechanization; task assignment; earnings inequality; technical change;

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  1. Joseph Zeira, 2006. "Machines as Engines of Growth," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c011_059, DEGIT, Dynamics, Economic Growth, and International Trade.
  2. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, American Economic Association, vol. 98(5), pages 1978-97, December.
  3. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
  4. Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organization and Inequality in a Knowledge Economy," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 121(4), pages 1383-1435, November.
  5. Arnaud Costinot & Jonathan Vogel, 2009. "Matching and Inequality in the World Economy," NBER Working Papers 14672, National Bureau of Economic Research, Inc.
  6. Sattinger, Michael, 1993. "Assignment Models of the Distribution of Earnings," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 31(2), pages 831-80, June.
  7. Claudia Goldin & Lawrence F. Katz, 1999. "The Returns to Skill in the United States across the Twentieth Century," NBER Working Papers 7126, National Bureau of Economic Research, Inc.
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