NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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James Bessen

Technology & Policy Research Initiative
BU School of Law
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Boston, MA 02215
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Institutional Affiliation: Boston University

NBER Working Papers and Publications

January 2018AI and Jobs: the role of demand
w24235
Artificial intelligence (AI) technologies will automate many jobs, but the effect on employment is not obvious. In manufacturing, technology has sharply reduced jobs in recent decades. But before that, for over a century, employment grew, even in industries experiencing rapid technological change. What changed? Demand was highly elastic at first and then became inelastic. The effect of artificial intelligence on jobs will similarly depend critically on the nature of demand. This paper presents a simple model of demand that accurately predicts the rise and fall of employment in the textile, steel and automotive industries. This model provides a useful framework for exploring how AI is likely to affect jobs over the next 10 or 20 years.
Artificial Intelligence and Jobs: The Role of Demand
in The Economics of Artificial Intelligence: An Agenda, Ajay Agrawal, Joshua Gans, and Avi Goldfarb, editors
In manufacturing, technology has sharply reduced jobs in recent decades. But before that, for over a century, employment grew, even in industries experiencing rapid technological change. What changed? Demand was highly elastic at first and then became inelastic. The effect of artificial intelligence (AI) on jobs will similarly depend critically on the nature of demand. This paper presents a simple model of demand that accurately predicts the rise and fall of employment in the textile, steel and automotive industries. This model provides a useful framework for exploring how AI is likely to affect jobs over the next 10 or 20 years.
 
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