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Technological innovation: the challenges for labour
19 December 2017
In accordance with the theory of skill-biased technological change, many researchers are convinced that automation predominantly threatens low-skilled workers, who are at risk of being substituted for intelligent machines (Graetz and Michaelis, 2015; Bonin, Gregory, and Zierhahn, 2015, p. 21; Arntz, Gregory, and Zierahn, 2016, p. 25). ... Somewhat in contrast, other researchers claim ‘middle-skill’ jobs characterised by routine analytical and manual tasks which are more easily automated could be ‘hollowed out’. This would reshape the workforce by way of a so-called job polarisation between non-repetitive low-skill and highly skilled occupations (Goos and Manning, 2007, p. 118-119; Rob, 2015, p. 1). The job polarisation trend has been seen in the US, the UK, and a number of European countries (Goos, Manning, and Salomons, 2009, pp. 61-62). ... Several case studies have examined the effects robot labour. Michaels and Graetz look at the effects of robot labour from 1993 to 2007 using data from 17 countries (2015). Intriguingly, their results are in stark contrast to Acemogul and Restrepo’s more alarming predictions. Michaels and Graetz argue automation leads to increases in both factor productivity and wages and reduces output prices across all of the 17 countries studied. However, the authors do maintain that “low-skilled workers seem to be crowded out” by new technologies, although the study, unfortunately, does not quantify the number of low-skilled workers likely to be affected.
Related publications
Goos, M., A. Manning, and A. Salomons, 2014, Explaining Job Polarization: Routine-Biased Technological Change and Offshoring, American Economic Review, 104(8), 2509-2526. https://www.aeaweb.org/articles?id=10.1257/aer.104.8.2509
Goos, M., A. Manning, and A. Salomons, 2009, Job Polarization in Europe, American Economic Review: Papers & Proceedings, 99(2), 58-63. https://www.aeaweb.org/articles?id=10.1257/aer.99.2.58
Graetz, G., and G. Michaels, Robots at Work, Centre for Economic Performance, CEP Discussion Paper No. 1335, http://cep.lse.ac.uk/pubs/download/dp1335.pdf
Michaels, G., A. Natraj, and J. Van Reenen, 2014, Has ICT Polarized Skill Demand? Evidence from Eleven Countries Over Twenty-Five Years, The Review of Economics and Statistics, 96(1), 60-77. https://www.mitpressjournals.org/doi/abs/10.1162/REST_a_00366