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Low-Skill and High-Skill Automation

Daron Acemoglu and Pascual Restrepo ()

No 24119, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We present a task-based model in which high- and low-skill workers compete against machines in the production of tasks. Low-skill (high-skill) automation corresponds to tasks performed by low-skill (high-skill) labor being taken over by capital. Automation displaces the type of labor it directly affects, depressing its wage. Through ripple effects, automation also affects the real wage of other workers. Counteracting these forces, automation creates a positive productivity effect, pushing up the price of all factors. Because capital adjusts to keep the interest rate constant, the productivity effect dominates in the long run. Finally, low-skill (high-skill) automation increases (reduces) wage inequality.

JEL-codes: J23 J24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lma
Date: 2017-12
Note: LS
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Published as Daron Acemoglu & Pascual Restrepo, 2018. "Low-Skill and High-Skill Automation," Journal of Human Capital, vol 12(2), pages 204-232.

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