EconPapers    
Economics at your fingertips  
 

Artificial Intelligence, Automation and Work

Daron Acemoglu and Pascual Restrepo ()

No dp-298, Boston University - Department of Economics - The Institute for Economic Development Working Papers Series from Boston University - Department of Economics

Abstract: We summarize a framework for the study of the implications of automation and AI on the demand for labor, wages, and employment. Our task-based framework emphasizes the displacement effect that automation creates as machines and AI replace labor in tasks that it used to perform. This displacement effect tends to reduce the demand for labor and wages. But it is counteracted by a productivity effect, resulting from the cost savings generated by automation, which increase the demand for labor in non-automated tasks. The productivity effect is complemented by additional capital accumulation and the deepening of automation (improvements of existing machinery), both of which further increase the demand for labor. These countervailing effects are incomplete. Even when they are strong, automation in- creases output per worker more than wages and reduce the share of labor in national income. The more powerful countervailing force against automation is the creation of new labor-intensive tasks, which reinstates labor in new activities and tends to in- crease the labor share to counterbalance the impact of automation. Our framework also highlights the constraints and imperfections that slow down the adjustment of the economy and the labor market to automation and weaken the resulting produc- tivity gains from this transformation: a mismatch between the skill requirements of new technologies, and the possibility that automation is being introduced at an excessive rate, possibly at the expense of other productivity-enhancing technologies.

Keywords: AI; automation; displacement effect; labor demand; inequality; productivity; tasks; technology; wages (search for similar items in EconPapers)
JEL-codes: J23 J24 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2018-01-04
New Economics Papers: this item is included in nep-big and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11) Track citations by RSS feed

Downloads: (external link)
http://www.bu.edu/econ/files/2012/11/Artificial-In ... omation-and-Work.pdf

Related works:
Chapter: Artificial Intelligence, Automation, and Work (2018) Downloads
Working Paper: Artificial Intelligence, Automation and Work (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bos:iedwpr:dp-298

Access Statistics for this paper

More papers in Boston University - Department of Economics - The Institute for Economic Development Working Papers Series from Boston University - Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Program Coordinator ().

 
Page updated 2020-01-23
Handle: RePEc:bos:iedwpr:dp-298