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Robot arithmetic: new technology and wages

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  • Caselli, Francesco
  • Manning, Alan

Abstract

Existing economic models show how new technology can cause large changes in relative wages and inequality. But there are also claims, based largely on verbal expositions, that new technology can harm workers on average or even all workers. This paper shows – under plausible assumptions - that new technology is unlikely to cause wages for all workers to fall and will cause average wages to rise if the prices of investment goods fall relative to consumer goods (a condition supported by the data). We outline how results may change with different assumptions.

Suggested Citation

  • Caselli, Francesco & Manning, Alan, 2018. "Robot arithmetic: new technology and wages," LSE Research Online Documents on Economics 87371, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:87371
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    File URL: http://eprints.lse.ac.uk/87371/
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    References listed on IDEAS

    as
    1. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    2. David Autor & David Dorn & Lawrence F. Katz & Christina Patterson & John Van Reenen, 2017. "The Fall of the Labor Share and the Rise of Superstar Firms," CEP Discussion Papers dp1482, Centre for Economic Performance, LSE.
    3. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, Oxford University Press, vol. 129(1), pages 61-103.
    4. Daron Acemoglu & Pascual Restrepo, 2017. "Robots and Jobs: Evidence from US Labor Markets," Boston University - Department of Economics - Working Papers Series dp-297, Boston University - Department of Economics.
    5. Graetz, Georg & Michaels, Guy, 2015. "Robots at Work," CEPR Discussion Papers 10477, C.E.P.R. Discussion Papers.
    6. 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.
    7. repec:eee:macchp:v2-3 is not listed on IDEAS
    8. Philippe Aghion & Benjamin F. Jones & Charles I. Jones, 2018. "Artificial Intelligence and Economic Growth," NBER Chapters,in: The Economics of Artificial Intelligence: An Agenda National Bureau of Economic Research, Inc.
    9. Daron Acemoglu & Pascual Restrepo, 2017. "Robots and Jobs: Evidence from US Labor Markets," NBER Working Papers 23285, National Bureau of Economic Research, Inc.
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    11. H. Uzawa, 1961. "Neutral Inventions and the Stability of Growth Equilibrium," Review of Economic Studies, Oxford University Press, vol. 28(2), pages 117-124.
    12. repec:oup:qjecon:v:129:y:2013:i:1:p:61-103 is not listed on IDEAS
    13. Jan De Loecker & Jan Eeckhout, 2017. "The Rise of Market Power and the Macroeconomic Implications," NBER Working Papers 23687, National Bureau of Economic Research, Inc.
    14. Jones, C.I., 2016. "The Facts of Economic Growth," Handbook of Macroeconomics, Elsevier.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Robot arithmetic: new technology and wages
      by maximorossi in NEP-LTV blog on 2018-10-24 12:47:35

    More about this item

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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