Automation and jobs: when technology boosts employment*
By James Bessen. Economic Policy, 2019
358 citations recorded by the source corpus.
Will new technologies cause industries to shed jobs, requiring novel policies to address mass unemployment? Sometimes productivity-enhancing technology increases industry employment instead. In manufacturing, jobs grew along with productivity for a century or more; only later did productivity gains bring declining employment. What changed? The elasticity of demand. Using data over two centuries for US textile, steel and auto industries, this paper shows that automation initially spurred job growth because demand was highly elastic. But demand later became satiated, leading to job losses. A simple model explains why this pattern might be common, suggesting that today’s technologies may cause some industries to decline and others to grow. Automation might not cause mass unemployment, but it may well require workers to make disruptive transitions to new industries, requiring new skills and occupations.
Subfields: Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/e5de1f8d4bfc0d55436a51b53c11265d9c0a82f1
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In Economics and Econometrics
Citations in the corpus
- Exposure of occupations to technologies of the fourth industrial revolution (2021, neutral): “However, technological change has various effects on the labor market, and previous waves of automation did not result in long-lasting technology-induced rising unemployment (Mokyr et al., 2015; Autor, 2015; Bessen, 2019).”
- Digital technologies, innovation, and skills: emerging trajectories and challenges (2021, neutral): “, 2002) and automation (e.g., Arntz et al., 2017; Bessen, 2019) and the extent to which they replace humans in performing tasks (Acemoglu and Restrepo, 2018).”
- The impact of industrial robots on EU employment and wages: A local labour market approach. Bruegel Working Paper Issue 02/18 April 2018 (2018, positive): “Bessen (2017), for example, finds empirically that computer technology is associated with job growth, which is particularly observable in non-manufacturing industries.”
- Economics of Artificial Intelligence: Implications for the Future of Work (2019, positive): “In contrast, if demand for products or services from the automated sector reacts very strongly to changes in price, that is, if demand is highly price elastic, any effects from labor-saving automation might be more than offset by increases in demand (Bessen, 2018).”