Automation: Theory, Evidence, and Outlook

Pascual Restrepo

Annual Review of Economics, 2024, vol. 16, issue 1, 1-25

Abstract: This article reviews the literature on automation and its impact on labor markets, wages, factor shares, and productivity. I first introduce the task model and explain why this framework offers a compelling way to think about recent labor market trends and the effects of automation technologies. The task model clarifies that automation technologies operate by substituting capital for labor in a widening range of tasks. This substitution reduces costs, creating a positive productivity effect, but it also reduces employment opportunities for workers displaced from automated tasks, creating a negative displacement effect. I survey the empirical literature and conclude that there is wide qualitative support for the implications of task models and the displacement effects of automation. I conclude by discussing shortcomings of the existing literature and avenues for future research.

Keywords: technology; robots; tasks; productivity; automation; wages; inequality (search for similar items in EconPapers)
JEL-codes: J23 J31 O33 (search for similar items in EconPapers)
Date: 2024
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Working Paper: Automation: Theory, Evidence, and Outlook (2023)
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DOI: 10.1146/annurev-economics-090523-113355

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