The increasing automation of tasks traditionally performed by labour is reshaping the relationship between skills and tasks of workers, unevenly affecting labour demand for low, middle, and high-skill occupations. To investigate the economy-wide response to automation, we designed a multisector Agent-Based Macroeconomic model accounting for workers' heterogeneity in skills and tasks. The model features endogenous skill-biased technical change, and heterogeneous consumption preferences for goods and personal services across workers of different skill types. Following available empirical evidence, we model automation as a manufacturing-specific, productivity-enhancing, and skill-biased technological process. We show how automation can trigger a structural change process from manufactory to personal services, which eventually increases the share of high and low skilled occupations, while reducing the share of middle-skilled ones. Following the literature, we label this dynamics as job polarisation throughout the paper. Finally, we study how labour market policies can feedback in the model dynamics. In our framework, a minimum wage policy (i) slows down the structural change process, (ii) boosts aggregate productivity, and (iii) accelerates the automation process, strengthening productivity growth within the manufacturing sector.(c) 2022 Elsevier B.V. All rights reserved.

Automation, Job Polarisation, and Structural Change / Fierro, Le; Caiani, A; Russo, A. - In: JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION. - ISSN 0167-2681. - 200:(2022), pp. 499-535. [10.1016/j.jebo.2022.05.025]

Automation, Job Polarisation, and Structural Change

Russo, A
2022-01-01

Abstract

The increasing automation of tasks traditionally performed by labour is reshaping the relationship between skills and tasks of workers, unevenly affecting labour demand for low, middle, and high-skill occupations. To investigate the economy-wide response to automation, we designed a multisector Agent-Based Macroeconomic model accounting for workers' heterogeneity in skills and tasks. The model features endogenous skill-biased technical change, and heterogeneous consumption preferences for goods and personal services across workers of different skill types. Following available empirical evidence, we model automation as a manufacturing-specific, productivity-enhancing, and skill-biased technological process. We show how automation can trigger a structural change process from manufactory to personal services, which eventually increases the share of high and low skilled occupations, while reducing the share of middle-skilled ones. Following the literature, we label this dynamics as job polarisation throughout the paper. Finally, we study how labour market policies can feedback in the model dynamics. In our framework, a minimum wage policy (i) slows down the structural change process, (ii) boosts aggregate productivity, and (iii) accelerates the automation process, strengthening productivity growth within the manufacturing sector.(c) 2022 Elsevier B.V. All rights reserved.
2022
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11566/315910
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 7
  • ???jsp.display-item.citation.isi??? 6
social impact