Automation and Rent Dissipation: Implications for Wages, Inequality, and Productivity

Daron Acemoglu and Pascual Restrepo

No 32536, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the effects of automation in economies with labor market distortions that generate worker rents—wages above opportunity cost—in some jobs. We show that automation targets high-rent tasks, dissipating rents and amplifying wage losses from automation. It also reduces within-group wage dispersion for exposed groups. Automation-driven rent dissipation is inefficient and reduces (and could even negate) the productivity gains from automation. Using data for the US from 1980 to 2016, we find evidence of sizable rent dissipation and reduced within-group wage dispersion due to automation. Using these estimates and accounting for equilibrium effects, we estimate that automation accounts for 52% of the increase in between-group inequality in the US since 1980, with rent dissipation being responsible for a fifth of this contribution. We also estimate that inefficient rent dissipation offset 60–90% of the productivity gains from automation since 1980.

JEL-codes: J23 J31 O33 (search for similar items in EconPapers)
Date: 2024-06
New Economics Papers: this item is included in nep-eff, nep-his, nep-lma, nep-mac and nep-tid
Note: EFG LS PR
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.nber.org/papers/w32536.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
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:nbr:nberwo:32536

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w32536
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).