Artificial Intelligence, Automation and Work

This paper makes the case that ultimately whether AI displaces labour, or creates other effects which counter it, is still a subject of great debate.

The paper summarises a framework for the study of the implications of automation and AI on the demand for labor, wages, and employment. It suggests that as tasks are replaced by automation this displacement effect tends to reduce the demand for labor and wages. But in this model this is counteracted by a productivity effect, resulting from the cost savings generated by automation, which increase the demand for labor in non-automated tasks. The productivity effect is complemented by additional capital accumulation and the deepening of automation (improvements of existing machinery), both of which further increase the demand for labor.

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Chosen by

Chris Pissarides

Theme

Workers in Transition

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