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Automation and New Tasks: How Technology Displaces and Reinstates Labor

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  • Daron Acemoglu
  • Pascual Restrepo

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," NBER Working Papers 25684, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:25684
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    References listed on IDEAS

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    Cited by:

    1. Stemmler, Henry, 2019. "Does automation lead to de-industrialization in emerging economies? Evidence from Brazil," Center for European, Governance and Economic Development Research Discussion Papers 382, University of Goettingen, Department of Economics.
    2. Daron Acemoglu & Claire Lelarge & Pascual Restrepo, 2020. "Competing with Robots: Firm-Level Evidence from France," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 383-388, May.
    3. Fleisher, Belton M. & McGuire, William H. & Wang, Xiaojun & Zhao, Min Qiang, 2020. "Induced Innovation: Evidence from China's Secondary Industry," IZA Discussion Papers 13072, Institute of Labor Economics (IZA).
    4. Martin Labaj & Materj Vitalos, 2019. "Automation and labor demand in European countries: A task-based approach to wage bill decomposition," Department of Economic Policy Working Paper Series 021, Department of Economic Policy, Faculty of National Economy, University of Economics in Bratislava.
    5. Daron Acemoglu & Pascual Restrepo, 2020. "The wrong kind of AI? Artificial intelligence and the future of labour demand," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 13(1), pages 25-35.
    6. Renda, Andrea & Reynolds, Nicole & Laurer, Moritz & Cohen, Gal, 2019. "Digitising Agrifood: Pathways and Challenges," CEPS Papers 25701, Centre for European Policy Studies.
    7. Krenz, Astrid & Prettner, Klaus & Strulik, Holger, 2018. "Robots, reshoring, and the lot of low-skilled workers," Center for European, Governance and Economic Development Research Discussion Papers 351, University of Goettingen, Department of Economics.
    8. Gardberg, Malin & Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2020. "Digitization-based automation and occupational dynamics," Economics Letters, Elsevier, vol. 189(C).
    9. David Kunst, 2019. "Deskilling among Manufacturing Production Workers," Tinbergen Institute Discussion Papers 19-050/VI, Tinbergen Institute.
    10. Anderton, Robert & Jarvis, Valerie & Labhard, Vincent & Morgan, Julian & Petroulakis, Filippos & Vivian, Lara, 2020. "Virtually everywhere? Digitalisation and the euro area and EU economies," Occasional Paper Series 244, European Central Bank.
    11. Guimarães, Luis & Gil, Pedro, 2019. "Looking ahead at the effects of automation in an economy with matching frictions," MPRA Paper 96238, University Library of Munich, Germany.
    12. Benjamin K. Couillard & Christopher L. Foote, 2019. "Recent Employment Growth in Cities, Suburbs, and Rural Communities," Working Papers 19-20, Federal Reserve Bank of Boston, revised 01 Dec 2019.
    13. MORIKAWA Masayuki, 2020. "Heterogeneous Relationships between Automation Technologies and Skilled Labor: Evidence from a Firm Survey," Discussion papers 20004, Research Institute of Economy, Trade and Industry (RIETI).
    14. Yashiv, Eran, 2020. "Moving from a Poor Economy to a Rich One: The Contradictory Roles of Technology and Job Tasks," IZA Discussion Papers 13131, Institute of Labor Economics (IZA).
    15. Michael Coelli & Jeff Borland, 2019. "Behind the headline number: Why not to rely on Frey and Osborne’s predictions of potential job loss from automation," Melbourne Institute Working Paper Series wp2019n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    16. Bernardo S Buarque & Ronald B Davies & Ryan M Hynes & Dieter F Kogler, 2020. "OK Computer: the creation and integration of AI in Europe," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 13(1), pages 175-192.
    17. J. Rodrigo Fuentes & Edward E. Leamer, 2019. "Effort: The Unrecognized Contributor to US Income Inequality," NBER Working Papers 26421, National Bureau of Economic Research, Inc.
    18. Luis Guimaraes & Pedro Mazeda Gil, 2019. "Explaining the labor share: automation vs labor market institutions," Economics Working Papers 19-01, Queen's Management School, Queen's University Belfast.
    19. Acemoglu, Daron & Üçer, Murat, 2019. "High-Quality Versus Low-Quality Growth in Turkey - Causes and Consequences," CEPR Discussion Papers 14070, C.E.P.R. Discussion Papers.

    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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