Labour Markets
The robot menace
ONE might say it is an encouraging sign that public worry over technology has (for the most part) turned from fear of stagnation to fear of technological unemployment thanks to too-rapid change. Signs of technological advancement are everywhere. Watson is shrinking, getting faster, and learning new skills. Google is bringing us driverless cars and the wonder that is this. Robots are looking ever more amazing, amazing, amazing. What can we expect, economically, from such changes?...MORE
So far as labour markets are concerned, economists are working to build better ways of considering the problem. This week's Free exchange column explains:
But plenty of research suggests that innovation need not translate into a shrinking role for human labour. In a new paper David Autor, also of MIT, argues that the standard “production functions” used by economists to describe how things get made need sprucing up. These functions treat labour and capital like separate elements in a recipe: mix a tablespoon of skilled work with a dose of capital to produce a helping of GDP. In the real world, however, the distinction is blurred.
Mr Autor describes an alternative approach in which production is modelled as a series of tasks. A firm’s challenge is to decide how to allocate them between capital and workers of varying skills, according to their respective comparative advantages. Assignments evolve over time as costs and technologies shift: an innovation may displace humans from some jobs, for instance, but make them more productive in others....
