IDEAS home Printed from https://ideas.repec.org/p/dar/wpaper/146300.html
   My bibliography  Save this paper

Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model

Author

Listed:
  • Dawid, Herbert
  • Neugart, Michael

Abstract

The advent of artificial intelligence is changing the task allocation of workers and machines in firms’ production processes with potentially wide ranging effects on workers and firms. We develop an agent-based simulation framework to investigate the consequences of different types of automation for industry output, the wage distribution, the labor share, and industry dynamics. It is shown how the competitiveness of markets, in particular barriers to entry, changes the effects that automation has on various outcome variables, and to which extent heterogeneous workers with distinct general skill endowments and heterogeneous firms featuring distinct wage offer rules affect the channels via which automation changes market outcomes.

Suggested Citation

  • Dawid, Herbert & Neugart, Michael, 2024. "Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 146300, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
  • Handle: RePEc:dar:wpaper:146300
    DOI: 10.1007/s00191-022-00803-5
    Note: for complete metadata visit http://tubiblio.ulb.tu-darmstadt.de/146300/
    as

    Download full text from publisher

    File URL: https://tuprints.ulb.tu-darmstadt.de/27326
    Download Restriction: no

    File URL: https://doi.org/10.1007/s00191-022-00803-5
    Download Restriction: no

    File URL: https://libkey.io/10.1007/s00191-022-00803-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Marco Vivarelli, 2014. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of Economic Literature," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(1), pages 123-154.
    2. Domini, Giacomo & Grazzi, Marco & Moschella, Daniele & Treibich, Tania, 2022. "For whom the bell tolls: The firm-level effects of automation on wage and gender inequality," Research Policy, Elsevier, vol. 51(7).
    3. Philippe Aghion & Céline Antonin & Simon Bunel & Xavier Jaravel, 2020. "What Are the Labor and Product Market Effects of Automation? New Evidence from France," SciencePo Working papers Main hal-03403062, HAL.
    4. Giovanni Dosi & Mauro Napoletano & Andrea Roventini & Tania Treibich, 2017. "Micro and macro policies in the Keynes+Schumpeter evolutionary models," Journal of Evolutionary Economics, Springer, vol. 27(1), pages 63-90, January.
    5. Alessandro Caiani & Alberto Russo & Mauro Gallegati, 2019. "Does inequality hamper innovation and growth? An AB-SFC analysis," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 177-228, March.
    6. Michael Neugart & Matteo G. Richiardi, 2012. "Agent-based models of the labor market," LABORatorio R. Revelli Working Papers Series 125, LABORatorio R. Revelli, Centre for Employment Studies.
    7. Herbert Dawid & Philipp Harting & Sander van der Hoog, 2019. "Manager remuneration, share buybacks, and firm performance," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(3), pages 681-706.
    8. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
    9. Barth, Erling & Roed, Marianne & Schone, Pal & Umblijs, Janis, 2020. "How Robots Change Within-Firm Wage Inequality," IZA Discussion Papers 13605, Institute of Labor Economics (IZA).
    10. Landini, Fabio & Lee, Keun & Malerba, Franco, 2017. "A history-friendly model of the successive changes in industrial leadership and the catch-up by latecomers," Research Policy, Elsevier, vol. 46(2), pages 431-446.
    11. Peter AUER & Sandrine CAZES, 2000. "The resilience of the long-term employment relationship: Evidence from the industrialized countries," International Labour Review, International Labour Organization, vol. 139(4), pages 379-408, December.
    12. Fierro, Luca Eduardo & Caiani, Alessandro & Russo, Alberto, 2022. "Automation, Job Polarisation, and Structural Change," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 499-535.
    13. repec:hal:spmain:info:hdl:2441/170cd4sul89ddpnfuomvfm0jc0 is not listed on IDEAS
    14. repec:hal:spmain:info:hdl:2441/3n1gbsj6rs80ipqv9d42nfd0ge is not listed on IDEAS
    15. Bertani, Filippo & Ponta, Linda & Raberto, Marco & Teglio, Andrea & Cincotti, Silvano, 2021. "The complexity of the intangible digital economy: an agent-based model," Journal of Business Research, Elsevier, vol. 129(C), pages 527-540.
    16. Dawid, Herbert, 2006. "Agent-based Models of Innovation and Technological Change," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 25, pages 1235-1272, Elsevier.
    17. Burda, Michael C. & Mertens, Antje, 2001. "Estimating wage losses of displaced workers in Germany," Labour Economics, Elsevier, vol. 8(1), pages 15-41, January.
    18. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    19. Giovanni Dosi & Andrea Roventini, 2019. "More is different ... and complex! the case for agent-based macroeconomics," Journal of Evolutionary Economics, Springer, vol. 29(1), pages 1-37, March.
    20. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057, Elsevier.
    21. Christopher J. Ruhm, 1987. "The Economic Consequences of Labor Mobility," ILR Review, Cornell University, ILR School, vol. 41(1), pages 30-42, October.
    22. Filippo Bertani & Marco Raberto & Andrea Teglio, 2020. "The productivity and unemployment effects of the digital transformation: an empirical and modelling assessment," Review of Evolutionary Political Economy, Springer, vol. 1(3), pages 329-355, November.
    23. Dawid, H. & Harting, P. & Neugart, M., 2018. "Cohesion policy and inequality dynamics: Insights from a heterogeneous agents macroeconomic model," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 220-255.
    24. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    25. repec:hal:spmain:info:hdl:2441/1a9acst1l284eo8kvqrqrnlbl1 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Raluca-Florentina Cretu & Daniela Tutui & Viorel-Costin Banta & Elena Claudia Serban & Laura - Eugenia - Lavinia Barna & Romeo-Catalin Cretu, 2024. "Effects of Artificial Intelligence-Based Technologies Implementation s on the Skills Needed in the Automotive Industry A Bibliometric Analysis," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 26(67), pages 801-801, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2022. "Technological paradigms, labour creation and destruction in a multi-sector agent-based model," Research Policy, Elsevier, vol. 51(10).
    2. Florent Bordot & Andre Lorentz, 2021. "Automation and labor market polarization in an evolutionary model with heterogeneous workers," LEM Papers Series 2021/32, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    3. Domini, Giacomo & Grazzi, Marco & Moschella, Daniele & Treibich, Tania, 2022. "For whom the bell tolls: The firm-level effects of automation on wage and gender inequality," Research Policy, Elsevier, vol. 51(7).
    4. Patrick Mellacher, 2021. "Growth, Inequality and Declining Business Dynamism in a Unified Schumpeter Mark I + II Model," Papers 2111.09407, arXiv.org, revised Nov 2023.
    5. Montobbio, Fabio & Staccioli, Jacopo & Virgillito, Maria Enrica & Vivarelli, Marco, 2022. "Robots and the origin of their labour-saving impact," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    6. Terranova, Roberta & Turco, Enrico M., 2022. "Concentration, stagnation and inequality: An agent-based approach," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 569-595.
    7. Fierro, Luca Eduardo & Caiani, Alessandro & Russo, Alberto, 2022. "Automation, Job Polarisation, and Structural Change," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 499-535.
    8. Barbieri, Laura & Mussida, Chiara & Piva, Mariacristina & Vivarelli, Marco, 2019. "Testing the employment and skill impact of new technologies: A survey and some methodological issues," MERIT Working Papers 2019-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. repec:spo:wpmain:info:hdl:2441/401t6job098n79ch91o9giov9d is not listed on IDEAS
    10. Dosi, Giovanni & Lamperti, Francesco & Mazzucato, Mariana & Napoletano, Mauro & Roventini, Andrea, 2023. "Mission-oriented policies and the “Entrepreneurial State” at work: An agent-based exploration," Journal of Economic Dynamics and Control, Elsevier, vol. 151(C).
    11. Van Roy, Vincent & Vértesy, Dániel & Vivarelli, Marco, 2018. "Technology and employment: Mass unemployment or job creation? Empirical evidence from European patenting firms," Research Policy, Elsevier, vol. 47(9), pages 1762-1776.
    12. Cirillo, Valeria & Evangelista, Rinaldo & Guarascio, Dario & Sostero, Matteo, 2021. "Digitalization, routineness and employment: An exploration on Italian task-based data," Research Policy, Elsevier, vol. 50(7).
    13. repec:hal:spmain:info:hdl:2441/401t6job098n79ch91o9giov9d is not listed on IDEAS
    14. Herbert Dawid & Jasper Hepp, 2022. "Distributional effects of technological regime changes: hysteresis, concentration and inequality dynamics," Review of Evolutionary Political Economy, Springer, vol. 3(1), pages 137-167, April.
    15. Dachs, Bernhard, 2017. "The impact of new technologies on the labour market and the social economy," MPRA Paper 90519, University Library of Munich, Germany.
    16. Caselli, Mauro & Fracasso, Andrea & Scicchitano, Sergio & Traverso, Silvio & Tundis, Enrico, 2021. "Stop worrying and love the robot: An activity-based approach to assess the impact of robotization on employment dynamics," GLO Discussion Paper Series 802, Global Labor Organization (GLO).
    17. Stefan Jestl, 2022. "Industrial Robots, and Information and Communication Technology: The Employment Effects in EU Labour Markets," wiiw Working Papers 215, The Vienna Institute for International Economic Studies, wiiw.
    18. Pouliakas, Konstantinos, 2018. "Determinants of Automation Risk in the EU Labour Market: A Skills-Needs Approach," IZA Discussion Papers 11829, Institute of Labor Economics (IZA).
    19. Domenico Delli Gatti & Roberta Terranova & Enrico Maria Turco, 2023. "Mind the Knowledge Gap! The Origins of Declining Business Dynamism in a Macro Agent-Based Model," CESifo Working Paper Series 10694, CESifo.
    20. Heyman, Fredrik & Norbäck, Pehr-Johan & Persson, Lars, 2021. "Automation, Work and Productivity: The Role of Firm Heterogeneity," Working Paper Series 1382, Research Institute of Industrial Economics, revised 09 Mar 2023.
    21. ARAI Kosuke & FUJIWARA Ippei & SHIROTA Toyoichiro, 2021. "Robot Penetration and Task Changes," Discussion papers 21093, Research Institute of Economy, Trade and Industry (RIETI).
    22. Loebbing, Jonas, 2018. "An Elementary Theory of Endogenous Technical Change and Wage Inequality," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181603, Verein für Socialpolitik / German Economic Association.

    More about this item

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dar:wpaper:146300. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dekanatssekretariat (email available below). General contact details of provider: https://edirc.repec.org/data/ivthdde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.