NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Race Between Machine and Man: Implications of Technology for Growth, Factor Shares and Employment

Daron Acemoglu, Pascual Restrepo

NBER Working Paper No. 22252
Issued in May 2016, Revised in June 2017
NBER Program(s):Economic Fluctuations and Growth

We examine the concerns that new technologies will render labor redundant in a framework in which tasks previously performed by labor can be automated and new versions of existing tasks, in which labor has a comparative advantage, can be created. In a static version where capital is fixed and technology is exogenous, automation reduces employment and the labor share, and may even reduce wages, while the creation of new tasks has the opposite effects. Our full model endogenizes capital accumulation and the direction of research towards automation and the creation of new tasks. If the long-run rental rate of capital relative to the wage is sufficiently low, the long-run equilibrium involves automation of all tasks. Otherwise, there exists a stable balanced growth path in which the two types of innovations go hand-in-hand. Stability is a consequence of the fact that automation reduces the cost of producing using labor, and thus discourages further automation and encourages the creation of new tasks. In an extension with heterogeneous skills, we show that inequality increases during transitions driven both by faster automation and introduction of new tasks, and characterize the conditions under which inequality is increasing or stable in the long run.

download in pdf format
   (1007 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w22252

Published: Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, vol 108(6), pages 1488-1542.

Users who downloaded this paper also downloaded* these:
Acemoglu, Naidu, Restrepo, and Robinson w20004 Democracy Does Cause Growth
Sachs and Kotlikoff w18629 Smart Machines and Long-Term Misery
Autor, Dorn, and Hanson w21906 The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade
Acemoglu and Autor w16082 Skills, Tasks and Technologies: Implications for Employment and Earnings
Sachs, Benzell, and LaGarda w21091 Robots: Curse or Blessing? A Basic Framework
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us