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Automation and Unemployment: Help is on the Way

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  • Zeira, Joseph
  • Nakamura, Hideki

Abstract

This paper presents a model of technical change that combines two lines of research together. It is a task based model, in which automation turns labor tasks to mechanized ones, and there is also a continuous addition of new labor tasks, as in the expanding variety literature. We impose three simple restrictions on the model. The first is that all new tasks are adopted. The second is that all new automation innovations are adopted and the third is that the share of labor does not converge to zero in the long run. We show that these restrictions imply that unemployment due to automation is expected to converge to zero over time.

Suggested Citation

  • Zeira, Joseph & Nakamura, Hideki, 2018. "Automation and Unemployment: Help is on the Way," CEPR Discussion Papers 12974, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12974
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    References listed on IDEAS

    as
    1. David Autor & David Dorn & Lawrence F Katz & Christina Patterson & John Van Reenen, 2020. "The Fall of the Labor Share and the Rise of Superstar Firms [“Automation and New Tasks: How Technology Displaces and Reinstates Labor”]," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(2), pages 645-709.
    2. Alberto Alesina & Michele Battisti & Joseph Zeira, 2018. "Technology and labor regulations: theory and evidence," Journal of Economic Growth, Springer, vol. 23(1), pages 41-78, March.
    3. Hernando Zuleta, 2008. "Factor Saving Innovations and Factor Income Shares," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 836-851, October.
    4. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    5. repec:wly:soecon:v:82:2:y:2015:p:647-667 is not listed on IDEAS
    6. Daron Acemoglu, 2010. "When Does Labor Scarcity Encourage Innovation?," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1037-1078.
    7. Hernando Zuleta, 2015. "Factor shares, inequality, and capital flows," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 647-667, October.
    8. Efraim Benmelech & Nittai K. Bergman & Hyunseob Kim, 2022. "Strong Employers and Weak Employees: How Does Employer Concentration Affect Wages?," Journal of Human Resources, University of Wisconsin Press, vol. 57(S), pages 200-250.
    9. David H. Autor, 2015. "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 3-30, Summer.
    10. F. A. Lutz, 1961. "The Theory of Capital," International Economic Association Series, Palgrave Macmillan, number 978-1-349-08452-4 edited by D. C. Hague, December.
    11. Nakamura, Hideki, 2009. "Micro-foundation for a constant elasticity of substitution production function through mechanization," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 464-472, September.
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    Citations

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    Cited by:

    1. Basso, Henrique S. & Jimeno, Juan F., 2021. "From secular stagnation to robocalypse? Implications of demographic and technological changes," Journal of Monetary Economics, Elsevier, vol. 117(C), pages 833-847.
    2. Oliver Kovacs, 2022. "Inclusive Industry 4.0 in Europe—Japanese Lessons on Socially Responsible Industry 4.0," Social Sciences, MDPI, vol. 11(1), pages 1-26, January.
    3. Inhye Yoo & Chan-Goo Yi, 2022. "Economic Innovation Caused by Digital Transformation and Impact on Social Systems," Sustainability, MDPI, vol. 14(5), pages 1-18, February.
    4. Ratneswary Rasiah & Jason J Turner & Yew Foo HO, 2019. "The Impact of Emotional Intelligence on Work Performance: Perceptions and Reflections from Academics in Malaysian Higher EducationObitat endiaest que," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 13(3), September.
    5. Ryosuke Shimizu & Shohei Momoda, 2020. "Does Automation Technology increase Wage?," KIER Working Papers 1039, Kyoto University, Institute of Economic Research.
    6. Shimizu, Ryosuke & Momoda, Shohei, 2023. "Does automation technology increase wage?," Journal of Macroeconomics, Elsevier, vol. 77(C).
    7. Oliver Kovacs, 2019. "Big IFs in Productivity-Enhancing Industry 4.0," Social Sciences, MDPI, vol. 8(2), pages 1-17, January.
    8. Guimarães, Luís & Mazeda Gil, Pedro, 2022. "Looking ahead at the effects of automation in an economy with matching frictions," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    9. Ryosuke Shimizu & Shohei Momoda, 2021. "Does Automation Technology increase Wage?," Discussion papers ron343, Policy Research Institute, Ministry of Finance Japan.
    10. Gravina, Antonio Francesco & Foster-McGregor, Neil, 2020. "Automation, globalisation and relative wages: An empirical analysis of winners and losers," MERIT Working Papers 2020-040, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    11. Juan E. Jacobo, 2022. "Back to the Surplus: An Unorthodox Neoclassical Model of Growth, Distribution and Unemployment with Technical Change," Papers 2211.14978, arXiv.org.
    12. M. Battisti & M. Del Gatto & A. F. Gravina & C. F. Parmeter, 2021. "Robots versus labor skills: a complementarity/substitutability analysis," Working Paper CRENoS 202104, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    13. ARAI Kosuke & FUJIWARA Ippei & SHIROTA Toyoichiro, 2021. "Robot Penetration and Task Changes," Discussion papers 21093, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    Automation; Unemployment; Technical change; Growth; Labor income share;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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