Automation, Partial and Full

Jakub Growiec

No 2020-048, KAE Working Papers from Warsaw School of Economics, Collegium of Economic Analysis

Abstract: When some steps of a complex, multi-step task are automated, the demand for human work in the remaining complementary sub-tasks goes up. In contrast, when the task is fully automated, the demand for human work declines. Partial automatability of complex tasks leads to a bottleneck of development (where further growth is constrained by the scarcity of essential human work) which is removed once the tasks become fully automatable. Theoretical analysis using a two-level nested CES production function specification demonstrates that the shift from partial to full automation generates anon-convexity: humans and machines switch from complementary to substitutable, and the share of output accruing to human workers switches from an upward to a downward trend. This process has implications for inequality, the risk of technological unemployment and the likelihood of a secular stagnation.

Keywords: Shadow economy; automation; complex task; complementarity; factor share; nested CES. (search for similar items in EconPapers)
JEL-codes: J23 L11 O30 O40 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2020-04
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http://hdl.handle.net/20.500.12182/1102 (application/pdf)

Related works:
Journal Article: AUTOMATION, PARTIAL AND FULL (2022)
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