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Automation and New Tasks: How Technology Displaces and Reinstates Labor

Author

Listed:
  • Daron Acemoglu

    (MIT and NBER)

  • Pascual Restrepo

    () (Boston University)

Abstract

We present a framework for understanding the effects of automation and other types of technological changes on labor demand, and use it to interpret changes in US employment over the recent past. At the center of our framework is the allocation of tasks to capital and labor—the task content of production. Automation, which enables capital to replace labor in tasks it was previously engaged in, shifts the task content of production against labor because of a displacement effect. As a result, automation always reduces the labor share in value added and may reduce labor demand even as it raises productivity. The effects of automation are counterbalanced by the creation of new tasks in which labor has a comparative advantage. The introduction of new tasks changes the task content of production in favor of labor because of a reinstatement effect, and always raises the labor share and labor demand. We show how the role of changes in the task content of production—due to automation and new tasks—can be inferred from industry-level data. Our empirical decomposition suggests that the slower growth of employment over the last three decades is accounted for by an acceleration in the displacement effect, especially in manufacturing, a weaker reinstatement effect, and slower growth of productivity than in previous decades.

Suggested Citation

  • Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Boston University - Department of Economics - The Institute for Economic Development Working Papers Series dp-315, Boston University - Department of Economics.
  • Handle: RePEc:bos:iedwpr:dp-315
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    File URL: http://www.bu.edu/econ/files/2019/05/JEP_automation_March_29_nber.pdf
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    References listed on IDEAS

    as
    1. L. Rachel Ngai & Christopher A. Pissarides, 2007. "Structural Change in a Multisector Model of Growth," American Economic Review, American Economic Association, vol. 97(1), pages 429-443, March.
    2. Jeffrey Lin, 2011. "Technological Adaptation, Cities, and New Work," The Review of Economics and Statistics, MIT Press, vol. 93(2), pages 554-574, May.
    3. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For the United States, 1979–1990," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 907-940.
    4. Wright, Greg C., 2014. "Revisiting the employment impact of offshoring," European Economic Review, Elsevier, vol. 66(C), pages 63-83.
    5. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    6. repec:eee:eecrev:v:108:y:2018:i:c:p:191-220 is not listed on IDEAS
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    Cited by:

    1. Luís Guimarães & Pedro Mazeda Gil, 2019. "Explaining the labor share: automation vs labor market institutions," CEF.UP Working Papers 1901, Universidade do Porto, Faculdade de Economia do Porto.
    2. Bernardo S. Buarque & Ronald B. Davies & Dieter F. Kogler & Ryan M. Hynes, 2019. "OK Computer: The Creation and Integration of AI in Europe," Working Papers 201911, School of Economics, University College Dublin.

    More about this item

    Keywords

    automation; displacement effect; labor demand; inequality; productivity; reinstatement effect; tasks; technology; wages.;

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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