Working Paper: CEPR ID: DP12974
Authors: Joseph Zeira; Hideki Nakamura
Abstract: This paper presents a model of technical change that combines two lines of research together. It is a task based model, in which automation turns labor tasks to mechanized ones, and there is also a continuous addition of new labor tasks, as in the expanding variety literature. We impose three simple restrictions on the model. The first is that all new tasks are adopted. The second is that all new automation innovations are adopted and the third is that the share of labor does not converge to zero in the long run. We show that these restrictions imply that unemployment due to automation is expected to converge to zero over time.
Keywords: automation; unemployment; technical change; growth; labor income share
JEL Codes: J64; O14; O30; O40
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| automation (L23) | unemployment (J64) |
| high wages (J31) | adoption of automation technologies (O14) |
| automation (L23) | new labor jobs (J89) |
| unemployment (J64) | convergence to zero (F62) |
| stable share of labor (J29) | unemployment diminishes (J65) |