In the U.S. and in other advanced economies, artificial intelligence, automation and robots have brought a transformative impact to the employment sector. Robots, or particularly industrial robots, are expected to blowout quickly in the next few decades and take over responsibilities that were previously done by labor. Of course, worries about the future of wages and jobs accompany these monumental changes.

Nonetheless, there really is nearly little work on the equilibrium impact of advanced technology, specifically of robots on the outcomes of the labor sector.

Pascual Restrepo from Boston University and Daron Acemoglu from MIT conducted a research that calculated the effects of industrial robots on wages and employment in the U.S. from 1990 to 2007 on the American local labor sectors. They discovered that the commuting areas that are most altered by robots post-1990 experienced same trends to those pre-1990.

Moreover, they found out that the effect of robots is different and is only faintly associated with the predominance of conventional jobs, the effect of imports coming from China and Mexico, along with total capital stock, offshoring and other computer technology.

If there weren’t any trade between the commuting areas, then their calculations suggest that every robot per thousand employees decreases the accumulated wages by about 0.73 percent and combined employment to population ratio by around 0.37 percent points.

On the other hand, if they concentrate on the employment declines in highly-robotized manufacturing industries, and assume that employment losses in other industries are caused by the local demand that does not directly convert into national impacts, the effects can be as little as 0.25 percent for wages and 0.18 percent for employment.

Since there are quite a few robots in the American economy, the amount of jobs lost because of them has been limited thus far, ranging from 360,000 and 670,000 jobs. Nevertheless, if the distribution of robots continues as projected by the experts during the next twenty years, the future total implications of the spread of robots could be much more substantial.


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