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Technologies and Labour : A Theoretical Model of Task-based Production in Labour Market with Search Frictions

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  • Vardanyan, David

    (Warwick University)

Abstract

This paper explores the effects of automation and the creation of new tasks on labour market outcomes by incorporating the task-based production of Acemoglu and Restrepo (2018a) into a modified Diamond-Mortensen-Pissarides (DMP) search and matching framework. While the effect on wages aligns with existing literature, the introduction of search frictions offers new insights regarding effects on unemployment. Automation is found to have a dual impact: it displaces workers from routine tasks but simultaneously generates productivity gains which can offset its negative effects. The net impact on unemployment and wages depends on the relative magnitude of these displacement and productivity effects which are analytically derived in the research. In contrast, the creation of new tasks has a more uniformly positive impact, as it both enhances the productivity and reinstates displaced workers, leading to lower unemployment and higher wages. The findings suggest that policies should ensure not to promote excessive automation, where it negatively affect the labour market. In contrast, fostering innovation and task creation can be effective ways to benefiting from technological advancements.

Suggested Citation

  • Vardanyan, David, 2024. "Technologies and Labour : A Theoretical Model of Task-based Production in Labour Market with Search Frictions," Warwick-Monash Economics Student Papers 79, Warwick Monash Economics Student Papers.
  • Handle: RePEc:wrk:wrkesp:79
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/wmesp/manage/79_-_vardanyan.pdf
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    References listed on IDEAS

    as
    1. David Autor & David Dorn & Lawrence F. Katz & Christina Patterson & John Van Reenen, 2017. "Concentrating on the Fall of the Labor Share," American Economic Review, American Economic Association, vol. 107(5), pages 180-185, May.
    2. Daron Acemoglu & Pascual Restrepo, 2022. "Tasks, Automation, and the Rise in U.S. Wage Inequality," Econometrica, Econometric Society, vol. 90(5), pages 1973-2016, September.
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    4. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    5. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    6. David H. Autor, 2015. "Why Are There Still So Many Jobs? The History and Future of Workplace Automation," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 3-30, Summer.
    7. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    8. Daron Acemoglu & Pascual Restrepo, 2016. "The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment," NBER Working Papers 22252, National Bureau of Economic Research, Inc.
    9. Joel Mokyr & Chris Vickers & Nicolas L. Ziebarth, 2015. "The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different?," Journal of Economic Perspectives, American Economic Association, vol. 29(3), pages 31-50, Summer.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Automation ; labour market frictions ; productivity ; technology ; unemployment JEL classifications: E22 ; E24 ; J23 ; J24 ; O33;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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