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  4. May 2020
  5. Unpacking Skill Bias: Automation and New Tasks

Unpacking Skill Bias: Automation and New Tasks

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Abstract

We extend the canonical model of skill-biased technical change by modeling the allocation of tasks to factors and allowing for automation and the creation of new tasks. In our model, factor prices depend on the set of tasks they perform. Automation can reduce real wages and generate sizable changes in inequality associated with small productivity gains. New tasks can increase or reduce inequality depending on whether they are performed by skilled or unskilled workers. Industry-level data suggest that automation significantly contributed to the rising skill premium, while new tasks reduced inequality in the past but have contributed to inequality recently.

Citation

Acemoglu, Daron, and Pascual Restrepo. 2020. "Unpacking Skill Bias: Automation and New Tasks." AEA Papers and Proceedings, 110: 356-61. DOI: 10.1257/pandp.20201063

Additional Materials

JEL Classification

  • D31 Personal Income, Wealth, and Their Distributions
  • I26 Returns to Education
  • J24 Human Capital; Skills; Occupational Choice; Labor Productivity
  • J31 Wage Level and Structure; Wage Differentials
  • O33 Technological Change: Choices and Consequences; Diffusion Processes
  • D31 Personal Income, Wealth, and Their Distributions
  • I26 Returns to Education