This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

« Back to Results

Automation, Jobs, and Productivity: Aggregate and Micro Evidence

Paper Session

Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM

Atlanta Marriott Marquis, International 5
Hosted By: American Economic Association
  • Chair: Erik Brynjolfsson, Massachusetts Institute of Technology

Demographics and Automation

Daron Acemoglu
,
Massachusetts Institute of Technology
Pascual Restrepo
,
Boston University

Abstract

We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data.

Automation, Labor Share, and Productivity: Plant-Level Evidence from United States Manufacturing

Emin Dinlersoz
,
U.S. Census Bureau
Zoltan Wolf
,
U.S. Census Bureau and Westat

Abstract

Using plant-level information on manufacturing technology, this paper provides new evidence on the relationship between automation, labor and capital usage, and productivity. Plants with higher degree of automation have lower production labor share and higher capital share, and the ratio of capital and production labor shares increases significantly with the extent of automation. In addition, while production workers in technologically advanced plants receive higher wages and have higher labor productivity, they constitute a lower fraction of total plant employment in more automated plants. These observations suggest a production function that allows relative allocations of capital and production labor to depend on technology. Using a model of CES production with endogenous technology choice, total factor productivity is estimated at the plant level. The estimates are compared with results from more standard specifications, such as Cobb-Douglas. The nexus of productivity, labor share, and automation is characterized.

Individual Consequences of Occupational Decline

Per-Anders Edin
,
Uppsala University
Georg Graetz
,
Uppsala University
Sofia Hernnas
,
Uppsala University
Guy Michaels
,
London School of Economics
Tiernan Evans
,
London School of Economics

Abstract

The prospect of labor-replacing technologies raises concerns about earnings and employment losses that workers may suffer when demand for their occupations declines. We estimate these losses using a new methodology that measures unanticipated declines in occupational employment, which we apply to panel data on individual workers in Sweden. When we compare workers with very similar initial characteristics, we find that on average those facing occupational decline lost about 2-5 percent of mean cumulative earnings from 1986-2013. But workers at the bottom of their occupations’ initial earnings distributions suffered considerably larger earnings losses. These earnings losses are partly accounted for by reduced time spent in employment, and increased time in unemployment and retraining.

Complements or Substitutes? Firm-Level Management of Labor and Technology

Susan R. Helper
,
Case Western Reserve University
Raphael Raphael Martins
,
New York University
Robert Seamans
,
New York University

Abstract

Labor and technology can be treated as complements or substitutes in a firm’s production function, and the approach can vary across firms. A firm’s adoption of new technologies may therefore have very different implications for labor across different types of firms. In this paper we study how labor in the U.S. automotive supply chain is affected by firm-level adoption of new technologies, including machine vision, robots, sensors and other forms of digitization. We also categorize firm management into two generic types, those pursuing a pragmatist approach and those pursuing a Taylorist approach, and study how effects of adoption vary by these types. We use new data from an in-depth plant-level survey of automation and employment practices in the automotive supply chain conducted in early 2018 that we match to earlier plant-level data from 2011 in some cases.
Discussant(s)
Seth Benzell
,
Massachusetts Institute of Technology
Devesh Raval
,
Federal Trade Commission
David Dorn
,
University of Zurich
Kristina McElheran
,
University of Toronto
JEL Classifications
  • O3 - Innovation; Research and Development; Technological Change; Intellectual Property Rights
  • J2 - Demand and Supply of Labor