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Modeling Automation

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  • Daron Acemoglu
  • Pascual Restrepo

Abstract

This paper points out that modeling automation as factor-augmenting technological change has several unappealing implications. Instead, modeling it as the process of machines replacing tasks previously performed by labor is both descriptively realistic and leads to distinct and empirically plausible predictions. In contrast to factor-augmenting technological change, the substitution of machines for labor in additional tasks always reduces the labor share in national income and can reduce the equilibrium wage (for realistic parameter values). This approach to automation also enables a discussion of several new forces at work, including the introduction of new tasks, changes in the comparative advantage of labor relative to capital, the deepening of automation (whereby machines become more productive in tasks that are already automated), and the role of the elasticity of substitution and capital accumulation in the long-run adjustment of the economy.

Suggested Citation

  • Daron Acemoglu & Pascual Restrepo, 2018. "Modeling Automation," NBER Working Papers 24321, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24321
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    References listed on IDEAS

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    1. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
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    5. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
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    7. 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.
    8. Jeffrey D. Sachs & Laurence J. Kotlikoff, 2012. "Smart Machines and Long-Term Misery," NBER Working Papers 18629, National Bureau of Economic Research, Inc.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    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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