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Annual Review of Economics

Volume 16, 2024

Automation: Theory, Evidence, and Outlook

Abstract

This article reviews the literature on automation and its impact on labor markets, wages, factor shares, and productivity. I first introduce the task model and explain why this framework offers a compelling way to think about recent labor market trends and the effects of automation technologies. The task model clarifies that automation technologies operate by substituting capital for labor in a widening range of tasks. This substitution reduces costs, creating a positive productivity effect, but it also reduces employment opportunities for workers displaced from automated tasks, creating a negative displacement effect. I survey the empirical literature and conclude that there is wide qualitative support for the implications of task models and the displacement effects of automation. I conclude by discussing shortcomings of the existing literature and avenues for future research.

Keyword(s): automation, inequality, JEL J23, JEL J31, JEL O33, productivity, robots, tasks, technology, wages
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/content/journals/10.1146/annurev-economics-090523-113355
2024-08-22
2024-12-14
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/content/journals/10.1146/annurev-economics-090523-113355
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Automation: Theory, Evidence, and Outlook
Annual Review of Economics 16, 1 (2024); https://doi.org/10.1146/annurev-economics-090523-113355
/content/journals/10.1146/annurev-economics-090523-113355
/content/journals/10.1146/annurev-economics-090523-113355
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