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Racing With or Against the Machine? Evidence on the Role of Trade in Europe

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  • Terry Gregory
  • Anna Salomons
  • Ulrich Zierahn

Abstract

Digital technologies displace labor from routine tasks, raising concerns that labor is racing against the machine. We develop an empirically tractable task-based framework to estimate the aggregate employment effects of routine-replacing technological change (RRTC), along with the labor and product demand channels through which this aggregate effect comes about, focusing on the role of inter-regional trade. While RRTC has indeed had strong displacement effects in Europe between 1999 and 2010, it has simultaneously created new jobs through increased product demand, resulting in net employment growth. However, the distribution of gains from technological progress matters for its job-creating potential.

Suggested Citation

  • Terry Gregory & Anna Salomons & Ulrich Zierahn, 2022. "Racing With or Against the Machine? Evidence on the Role of Trade in Europe," Journal of the European Economic Association, European Economic Association, vol. 20(2), pages 869-906.
    • Handle: RePEc:oup:jeurec:v:20:y:2022:i:2:p:869-906.
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    File URL: http://hdl.handle.net/10.1093/jeea/jvab040
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