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Automation and heterogeneous earnings dynamics

Author

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  • Gallen, Trevor
  • Kim, Soojin

Abstract

We examine the effects of automation on workers’ earnings dynamics in the United States using micro-level panel data. We find a significant and adverse impact of automation on earnings, particularly for older individuals, those in routine occupations, or during recessionary periods. However, our analysis of taxes and program participation suggests that the status-quo tax and transfer system mitigates these losses by half.

Suggested Citation

  • Gallen, Trevor & Kim, Soojin, 2025. "Automation and heterogeneous earnings dynamics," Economics Letters, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003556
    DOI: 10.1016/j.econlet.2025.112518
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    References listed on IDEAS

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    1. Daron Acemoglu & Andrea Manera & Pascual Restrepo, 2020. "Does the US Tax Code Favor Automation?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 51(1 (Spring), pages 231-300.
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    4. James Bessen & Maarten Goos & Anna Salomons & Wiljan van den Berge, 2025. "What Happens to Workers at Firms that Automate?," The Review of Economics and Statistics, MIT Press, vol. 107(1), pages 125-141, January.
    5. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum & Nicole Woessner, 2021. "The Adjustment of Labor Markets to Robots [“Skills, Tasks and Technologies: Implications for Employment and Earnings]," Journal of the European Economic Association, European Economic Association, vol. 19(6), pages 3104-3153.
    6. Jaimovich, Nir & Saporta-Eksten, Itay & Siu, Henry & Yedid-Levi, Yaniv, 2021. "The macroeconomics of automation: Data, theory, and policy analysis," Journal of Monetary Economics, Elsevier, vol. 122(C), pages 1-16.
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    8. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue nov.
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    More about this item

    Keywords

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    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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