Looking ahead at the effects of automation in an economy with matching frictions

• Type: Article in International Scientific Journal
• Date: 2022

Authors

Guimaraes, L (Author) Other; Pedro Rui Mazeda Gil (Author) FEP

Journal

Title: Journal of Economic Dynamics and Control

Vol. 144

ISSN: 0165-1889

Indexing

ISI Web of Knowledge - 4 Citations

Scopus - 5 Citations

Other information

Authenticus ID: P-00X-77C

DOI: 10.1016/j.jedc.2022.104538

Abstract (EN): We look at how advances in AI and Robotics will affect employment in an economy with matching frictions and endogenous job destruction. In the model, tasks can be produced by workers or by machines. Workers have a comparative advantage in producing advanced tasks but machines tend to catch up with labor, leading to automation. To calibrate the model, we rely on predictions in the literature about the expected share of automated jobs due to AI and Robotics. Our model suggests that these technological innovations will raise job destruction but also job creation because the prospect of automating jobs increases the value of hiring workers. Therefore, long-run employment might fall but not massively. Furthermore, employment will likely rise if consumers value human interactions (human touch ) as the relative price of labor tasks increases with widespread usage of machines. Regarding policy, we compare the outcomes of a robot tax with alternative policies. (c) 2022 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 19