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Robots, AI, and unemployment

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  • Kudoh, Noritaka
  • Miyamoto, Hiroaki

Abstract

Do robots and artificial intelligence (AI) cause joblessness? We develop a dynamic general equilibrium model with search-matching frictions. In our model, robots substitute routine human tasks, and AI substitutes abstract human tasks. We find a cutoff level for the elasticity of substitution between routine labor input and robots, above which an increase in robot productivity leads to increased unemployment. We examine a scenario in which AI-driven automation of abstract tasks transforms high-skilled workers into unskilled ones. A substantial productivity gain through AI is required to offset the output loss associated with this labor displacement.

Suggested Citation

  • Kudoh, Noritaka & Miyamoto, Hiroaki, 2025. "Robots, AI, and unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 174(C).
    • Handle: RePEc:eee:dyncon:v:174:y:2025:i:c:s0165188925000351
    DOI: 10.1016/j.jedc.2025.105069
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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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