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The Impact of Automation on Employment: Just the Usual Structural Change?

Author

Listed:
  • Ben Vermeulen

    (Institute of Economics, University of Hohenheim, 70599 Stuttgart, Germany)

  • Jan Kesselhut

    (Institute of Economics, University of Hohenheim, 70599 Stuttgart, Germany)

  • Andreas Pyka

    (Institute of Economics, University of Hohenheim, 70599 Stuttgart, Germany)

  • Pier Paolo Saviotti

    (Faculty of Geosciences, University of Utrecht, 3500 Utrecht, The Netherlands)

Abstract

We study the projected impact of automation on employment in the forthcoming decade, both at the macro-level and in actual (types of) sectors. Hereto, we unite an evolutionary economic model of multisectoral structural change with labor economic theory. We thus get a comprehensive framework of how displacement of labor in sectors of application is compensated by intra- and intersectoral countervailing effects and notably mopped up by newly created, labor-intensive sectors. We use several reputable datasets with expert projections on employment in occupations affected by automation (and notably by the introduction of robotics and AI) to pinpoint which and how sectors and occupations face employment shifts. This reveals how potential job loss due to automation in “applying” sectors is counterbalanced by job creation in “making” sectors as well in complementary and quaternary, spillover sectors. Finally, we study several macro-level scenarios on employment and find that mankind is facing “the usual structural change” rather than the “end of work”. We provide recommendations on policy instruments that enhance the dynamic efficiency of structural change.

Suggested Citation

  • Ben Vermeulen & Jan Kesselhut & Andreas Pyka & Pier Paolo Saviotti, 2018. "The Impact of Automation on Employment: Just the Usual Structural Change?," Sustainability, MDPI, vol. 10(5), pages 1-27, May.
    • Handle: RePEc:gam:jsusta:v:10:y:2018:i:5:p:1661-:d:148182
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    More about this item

    Keywords

    structural change; employment; labor; automation; automatability; occupation; robot; robotization; AI; computerization;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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