Tasks, Automation, and the Rise in U.S. Wage Inequality
<jats:p>We document that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation. We develop a conceptual framework where tasks acr...
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| Format: | Article |
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The Econometric Society
2022
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| Online Access: | https://hdl.handle.net/1721.1/146052 |
| _version_ | 1811071043093135360 |
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| author | Acemoglu, Daron Restrepo, Pascual |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Acemoglu, Daron Restrepo, Pascual |
| author_sort | Acemoglu, Daron |
| collection | MIT |
| description | <jats:p>We document that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation. We develop a conceptual framework where tasks across industries are allocated to different types of labor and capital. Automation technologies expand the set of tasks performed by capital, displacing certain worker groups from jobs for which they have comparative advantage. This framework yields a simple equation linking wage changes of a demographic group to the
<jats:italic>task displacement</jats:italic> it experiences. We report robust evidence in favor of this relationship and show that regression models incorporating task displacement explain much of the changes in education wage differentials between 1980 and 2016. The negative relationship between wage changes and task displacement is unaffected when we control for changes in market power, deunionization, and other forms of capital deepening and technology unrelated to automation. We also propose a methodology for evaluating the full general equilibrium effects of automation, which incorporate induced changes in industry composition and ripple effects due to task reallocation across different groups. Our quantitative evaluation explains how major changes in wage inequality can go hand‐in‐hand with modest productivity gains.
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| first_indexed | 2024-09-23T08:45:15Z |
| format | Article |
| id | mit-1721.1/146052 |
| institution | Massachusetts Institute of Technology |
| last_indexed | 2024-09-23T08:45:15Z |
| publishDate | 2022 |
| publisher | The Econometric Society |
| record_format | dspace |
| spelling | mit-1721.1/1460522022-11-01T03:46:16Z Tasks, Automation, and the Rise in U.S. Wage Inequality Acemoglu, Daron Restrepo, Pascual Massachusetts Institute of Technology. Department of Economics Economics and Econometrics <jats:p>We document that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation. We develop a conceptual framework where tasks across industries are allocated to different types of labor and capital. Automation technologies expand the set of tasks performed by capital, displacing certain worker groups from jobs for which they have comparative advantage. This framework yields a simple equation linking wage changes of a demographic group to the <jats:italic>task displacement</jats:italic> it experiences. We report robust evidence in favor of this relationship and show that regression models incorporating task displacement explain much of the changes in education wage differentials between 1980 and 2016. The negative relationship between wage changes and task displacement is unaffected when we control for changes in market power, deunionization, and other forms of capital deepening and technology unrelated to automation. We also propose a methodology for evaluating the full general equilibrium effects of automation, which incorporate induced changes in industry composition and ripple effects due to task reallocation across different groups. Our quantitative evaluation explains how major changes in wage inequality can go hand‐in‐hand with modest productivity gains. </jats:p> 2022-10-31T13:34:31Z 2022-10-31T13:34:31Z 2022 Article http://purl.org/eprint/type/JournalArticle 0012-9682 https://hdl.handle.net/1721.1/146052 Acemoglu, Daron and Restrepo, Pascual. 2022. "Tasks, Automation, and the Rise in U.S. Wage Inequality." 90 (5). 10.3982/ecta19815 Creative Commons Attribution-NonCommercial-NoDerivs License http://creativecommons.org/licenses/by-nc-nd/4.0/ application/pdf The Econometric Society Wiley |
| spellingShingle | Economics and Econometrics Acemoglu, Daron Restrepo, Pascual Tasks, Automation, and the Rise in U.S. Wage Inequality |
| title | Tasks, Automation, and the Rise in U.S. Wage Inequality |
| title_full | Tasks, Automation, and the Rise in U.S. Wage Inequality |
| title_fullStr | Tasks, Automation, and the Rise in U.S. Wage Inequality |
| title_full_unstemmed | Tasks, Automation, and the Rise in U.S. Wage Inequality |
| title_short | Tasks, Automation, and the Rise in U.S. Wage Inequality |
| title_sort | tasks automation and the rise in u s wage inequality |
| topic | Economics and Econometrics |
| url | https://hdl.handle.net/1721.1/146052 |
| work_keys_str_mv | AT acemogludaron tasksautomationandtheriseinuswageinequality AT restrepopascual tasksautomationandtheriseinuswageinequality |