Technologies and Labour: A Theoretical Model of Task-based Production in Labour Market with Search Frictions

David Vardanyan
Additional contact information
David Vardanyan: Warwick University

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: This paper explores the effects of automation and the creation of new tasks on labour market outcomes by incorporating the task-based production of Acemoglu and Restrepo (2018a) into a modified Diamond-Mortensen-Pissarides (DMP) search and matching framework. While the effect on wages aligns with existing literature, the introduction of search frictions offers new insights regarding effects on unemployment. Automation is found to have a dual impact: it displaces workers from routine tasks but simultaneously generates productivity gains which can offset its negative effects. The net impact on unemployment and wages depends on the relative magnitude of these displacement and productivity effects which are analytically derived in the research. In contrast, the creation of new tasks has a more uniformly positive impact, as it both enhances the productivity and reinstates displaced workers, leading to lower unemployment and higher wages. The findings suggest that policies should ensure not to promote excessive automation, where it negatively affect the labour market. In contrast, fostering innovation and task creation can be effective ways to benefiting from technological advancements.

Keywords: Automation; labour market frictions; productivity; technology; unemployment JEL classifications: E22; E24; J23; J24; O33 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-dge, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://warwick.ac.uk/fac/soc/economics/research/wmesp/manage/79_-_vardanyan.pdf

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:wrk:wrkesp:79

Access Statistics for this paper

More papers in Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers Contact information at EDIRC.
Bibliographic data for series maintained by Margaret Nash ().