Working Paper: NBER ID: w24421
Authors: Daron Acemoglu; Pascual Restrepo
Abstract: We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data.
Keywords: demographics; automation; robots; labor markets; productivity
JEL Codes: J11; J23; J24; O33; O47; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Aging populations (J11) | Greater industrial automation (L63) |
| Aging populations (J11) | Increased use of robots (L63) |
| Aging populations (J11) | Substitution for middle-aged workers (J29) |
| Ratio of older to middle-aged workers (J26) | Rise in robot adoption (L63) |
| Aging (J14) | Increase of 0.9 robots per thousand workers (J89) |
| Demographic changes (J11) | Initial productivity reduction (O49) |
| Induced automation response (O31) | Overall productivity increases (O49) |
| Demographic shifts (J11) | Decline in labor share (E25) |