Benign Effects of Automation: New Evidence from Patent Texts

Katja Mann and Lukas Püttmann
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Katja Mann: Copenhagen Business School
Lukas Püttmann: Unaffiliated

The Review of Economics and Statistics, 2023, vol. 105, issue 3, 562-579

Abstract: We provide a new measure of automation based on patents and study its employment effects. Classifying all U.S. patents granted between 1976 and 2014 as automation or nonautomation patents, we document a strong rise in the number and share of automation patents. We link patents to their industries of use and to commuting zones. To estimate the effect of automation, we use an instrumental variables strategy that relies on innovations developed independently from U.S. labor market trends. We find that automation technology has a positive effect on employment in local labor markets, driven by job growth in the service sector.

Date: 2023
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