Obsolescence Rents: Teamsters, Truckers, and Impending Innovations
We consider large, permanent shocks to individual occupations whose arrival date is uncertain. We are motivated by the advent of self-driving trucks, which will dramatically reduce demand for truck drivers. Using a bare-bones overlapping generations model, we examine an occupation facing obsolescence. We show that workers must be compensated to enter the occupation - receiving what we dub obsolescence rents - with fewer and older workers remaining in the occupation. We investigate the market for teamsters at the dawn of the automotive truck as an á propos parallel to truckers themselves, as self-driving trucks crest the horizon. As widespread adoption of trucks drew nearer, the number of teamsters fell, the occupation became ‘grayer’, and teamster wages rose, as predicted by the model.
-
-
Copy CitationCostas Cavounidis, Qingyuan Chai, Kevin Lang, and Raghav Malhotra, "Obsolescence Rents: Teamsters, Truckers, and Impending Innovations," NBER Working Paper 31743 (2023), https://doi.org/10.3386/w31743.
Non-Technical Summaries
- When a new technology threatens to take away jobs in an established industry, employment in that industry declines and wages rise....