Who Produces the Robots?

Hans Gersbach and Samuel Schmassmann

No 15985, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: To assess how disruptive automation and digitization could be, we develop a three-industry model involving routine and non-routine production of consumption goods or services, as well as capital good production. Workers exhibit different skill levels and only high-skilled workers can perform non-routine tasks in production. We compare an industrial economy in which the production of capital goods (machines) requires routine tasks with a future economy, the robotic economy, in which the production of capital goods (robots) requires non-routine tasks. We show that in an industrial economy, technological progress in capital production has an equalizing effect on wages and leads to integrated labor markets, whereas in a robotic economy, it can lead to a disintegration of labor markets, with falling real wages for low-skilled workers and increasing real wages for high-skilled workers.

Keywords: Skills; ·; technological; change; ·; task; ·; complexity; ·; wage; inequality (search for similar items in EconPapers)
JEL-codes: O31 O38 (search for similar items in EconPapers)
Date: 2021-03
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