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Cited by 409Labor market dynamics and wage inequalityEconomic Growth and ProductivityUnemployment and Economic Growth

Automation and jobs: when technology boosts employment*

Open access
Bessen, James·2019·Economic Policy
DOI 10.1093/epolic/eiaa001
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Abstract

SUMMARY: Will new technologies cause industries to shed jobs, requiring novel policies to address mass unemployment? Sometimes productivity-enhancing technology increases industry employment instead. In manufacturing, jobs grew along with productivity for a century or more; only later did productivity gains bring declining employment. What changed? The elasticity of demand. Using data over two centuries for US textile, steel and auto industries, this paper shows that automation initially spurred job growth because demand was highly elastic. But demand later became satiated, leading to job losses. A simple model explains why this pattern might be common, suggesting that today’s technologies may cause some industries to decline and others to grow. Automation might not cause mass unemployment, but it may well require workers to make disruptive transitions to new industries, requiring new skills and occupations.

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  • In some domains other than healthcare, education and computer code, rapid productivity growth will erode employment.

    “But in other domains, yes, rapid productivity growth will erode employment (Bessen, 2019).”

    From Applying AI to Rebuild Middle Class Jobs (2024) · cites this paper as Bessen, 2019

    The Conclusion and “The direction and rate of job changes” support employment losses in some industries, particularly manufacturing, as productivity grows. But the paper says demand elasticity—not rapid productivity growth by itself—determines whether employment rises or falls. The claim omits that condition; the cited passages do not establish healthcare, education, and computer code as the relevant exceptions. Page numbers are unavailable in our copy. (LLM, conf=0.86)

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Cites

Flagged first, then by citations

Research works printed but not linked: 31

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Cited by

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Authors
Bessen, J.
Affiliations
Boston University (US)
Corresponding author
Bessen, James
ORCID
Bessen, James
Venue
Economic Policy
Publisher
Oxford University Press (OUP)
Published
2019-10-01
Volume
34
Issue
100
Pages
589-626
ISSN
  • 0266-4658 (ISSN-L)
  • 1468-0327
DOI
10.1093/epolic/eiaa001
OpenAlex
W3122263906
Cited by
409
References
1
Citations by year
2026: 60 · 2025: 74 · 2024: 70 · 2023: 72 · 2022: 45 · 2021: 41 · 2020: 15 · 2019: 10 · 2018: 17 · 2017: 1 · 2013: 1
FWCI
32.75
Type
journal article
Language
en
Open access
Licence
academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model (vor)
Locations
  • Economic Policy (publishedVersion)
  • SSRN Electronic Journal (acceptedVersion)
  • bepress Legal Repository (submittedVersion, cc-by-nc-sa)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Labor market dynamics and wage inequality
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Unemployment and Economic Growth
Keywords
automation, employment effects of technology, productivity growth, demand elasticity, manufacturing employment, textile industry, steel industry, automotive industry, structural unemployment, labour market transitions, deindustrialization

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