Tasks, Automation, and the Rise in U.S. Wage Inequality

Abstract

We document that between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation. We develop a conceptual framework where tasks across industries are allocated to different types of labor and capital. Automation technologies expand the set of tasks performed by capital, displacing certain worker groups from jobs for which they have comparative advantage. This framework yields a simple equation linking wage changes of a demographic group to the task displacement it experiences. We report robust evidence in favor of this relationship and show that regression models incorporating task displacement explain much of the changes in education wage differentials between 1980 and 2016. The negative relationship between wage changes and task displacement is unaffected when we control for changes in market power, deunionization, and other forms of capital deepening and technology unrelated to automation. We also propose a methodology for evaluating the full general equilibrium effects of automation, which incorporate induced changes in industry composition and ripple effects due to task reallocation across different groups. Our quantitative evaluation explains how major changes in wage inequality can go hand‐in‐hand with modest productivity gains.

GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language Models

“…More recent studies have distinguished between technology's task-displacement and task-reinstatement effects (where new technology increases the need for a wider array of labor-intensive tasks) (Acemoglu andRestrepo, 2018, 2019). Several studies have shown that automation technologies have resulted in wage inequality in the US, driven by relative wage declines for workers specializing in routine tasks (Autor et al, 2006;Van Reenen, 2011;Acemoglu and Restrepo, 2022b).…”

Financial Reporting Quality and Wage Differentials: Evidence from Worker‐Level Data

“…Our multivariate research design is subject to other forms of endogeneity besides unobserved worker ability and worker-to-firm matching, such as changes in unobservable firm characteristics that impact both wages and financial reporting quality (e.g., Roberts and Whited [2013]). 24 We propose two settings to provide additional support of compensating wage Acemoglu et al [2022]) although we acknowledge that an error in this split variable can be correlated with wage trajectories. 24 One potential endogeneity issue is unobservable and correlated variation in the riskiness of a firm's projects, financial reporting quality, and returns to labor.…”

Routine job dynamics in the Swiss labor market

“…Whereas the first narrative projects a general labor market "upgrading" due to digitalization, the second predicts a "de-routinization" accompanied by a "job polarization" of the labor market, as routine jobs tend to be located in the middle of the wage distribution and non-routine occupations at the upper and lower tails. While the literature focusing on the US labor market found convincing evidence supporting recent job polarization trends (e.g., Acemoglu & Restrepo, 2022;Autor et al, 2008;Goos & Manning, 2007;Goos et al, 2009), studies for Europe show considerable cross-country variation between general upgrading and polarization (see, e.g., Fernández-Macías, 2012;Kurer & Palier, 2019;Oesch & Piccitto, 2019;Oesch & Rodríguez Menés, 2011).…”