The Remainder Effect: How Automation Complements Labor Quality

Monopsony and Automation

“…We identify conditions under which rms could engage in excessive automation (Acemoglu and Restrepo, 2018a,c) from the stand point of a social planner. Thereby, we can revisit the assumption that rms take wages as given when deciding to automate (Acemoglu and Restrepo, 2020;Adachi et al, 2020;Bessen et al, 2022;Koch et al, 2021). Empirically, we nd that the negative impacts of industrial robots on employment and wage growth in US commuting zones are ampli ed in more concentrated local labor markets where rms hold more wage-setting power.…”

The Empirics of Technology, Employment and Occupations: Lessons Learned and Challenges Ahead

“…Turning our attention to the impact of innovation on workers' skills, the literature on SBTC has underlined a substitution effect between new technologies and unskilled workers, and a positive relationship between new technologies and skilled (white-collar) workers. At the same time, some recent literature either do not find the skill-bias (Hirvonen et al, 2022) or suggest that innovation generates a general positive impact at the firm level in terms of labour quality (Bessen et al, 2022), suggesting that the key issue is not skilled vs. unskilled, but rather the difference across firms in terms of innovativeness and across jobs in terms of task content. In parallel, the empirical literature has focused on different categories of exposed workers, focussing on routinised vs. non-routinised tasks and occupations, or manual vs. cognitive tasks and occupations.…”

“…However, their results are heavily driven by product innovations (see Section 2 about the labourfriendly nature thereof): indeed, 91% of the scrutinised firms claim that their technology investments were motivated by new products and increasing demand. Complementarity of investments in automation/ICT/AI is stressed in Bessen et al (2022). Using Burning Glass Technologies data, they measure firm-level investment in automation/digitisation technologies in companies who make major investments in their internal information technology.…”

“…Some authors, focussing on high innovative firms, show, for example, that the adoption of ICT increases demand for a variety of skills and tasks and raises wages (e.g. Bessen et al 2022). However, other authors find that, particularly in low wage industries, the quality of jobs, wage levels, and equal treatment of disadvantaged workers can be seriously threatened by new technological advancements (e.g.…”