Dynamics of automation in economic growth and the labor market

• Type: Article in International Scientific Journal
• Date: 2024

Authors

Óscar Afonso (Author) FEP

Journal

Title: Bulletin of Economic Research

Vol. 76 No. 4

Pages: 1007-1018

ISSN: 0307-3378

Publisher: Wiley-Blackwell

Indexing

ISI Web of Knowledge - 0 Citations

Scopus - 0 Citations

Other information

Authenticus ID: P-010-ZMR

DOI: 10.1111/boer.12465

Abstract (EN): This study delves into the intricate dynamics of technology, labor markets, and economic growth within the context of Industry 4.0. By integrating automation capital into a dynamic general equilibrium model, we examine its implications for economic performance and social equity. The empirical analysis highlights the substitutability of unskilled labor by automation, revealing a nuanced relationship between automation adoption, the skill premium, and economic growth. Contrary to conventional wisdom, our findings suggest that a reduced ratio of unskilled to skilled labor, driven by automation, can lead to both an increase in the skill premium and sustained economic growth, even in the face of demographic challenges such as declining populations. However, this trend also exacerbates income inequality, underscoring the imperative for policy interventions aimed at promoting skill enhancement and ensuring equitable distribution of technological advancements.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 12