Automation and New Tasks: How Technology Displaces and Reinstates Labor

Acemoglu and Restrepo (2019) formalize the tension between displacement and reinstatement forces in a general-equilibrium model, showing that automation strictly reduces labor demand unless offset by the creation of new tasks in which labor has a comparative advantage.

“Acemoglu and Restrepo (2019) formalize this tension between displacement and reinstatement forces in a generalequilibrium model, showing that automation strictly reduces labor demand unless offset by the creation of new tasks in which labor has a comparative advantage.”

Technology displaces and reinstates labor.

“This observation is an important empirical support for the recent theoretical work in labor economics, which posits that “technology displaces and reinstates labor” (Acemoglu and Restrepo 2019).”

AI chatbots have created new job tasks, extending even to workers who do not use the tools directly, signaling broader workplace transformations.

“Second, aligning with theoretical predictions for how automation technologies may reinstate labor demand (Acemoglu and Restrepo, 2019), we find that AI chatbots have created new job tasks-extending even to workers who do not use the tools directly-signaling broader workplace transformations.”

Concerns and uncertainties about the tentative loss of employment opportunities resulting from increased automation are present in agriculture, forestry and fisheries sectors.

“Similar concerns and uncertainties about the tentative loss of employment opportunities resulting from increased automation [77] are present in these sectors as well of course [78].”

ICT improvements that automate tasks previously done by labor can directly reduce the labor share if worker displacement effects outweigh increased demand for newly created non-automated tasks.

“ICT improvements that facilitate the automation of tasks previously done by labor can directly reduce the labor share if worker displacement effects from the automated tasks outweigh increased demand for newly created non-automated tasks(Acemoglu and Restrepo, 2019).”

AI has benefited from investment by companies hoping to cut labour and transaction costs, increase outputs, raise productivity, manage workforce, refine customer knowledge, and establish monopoly positions.

“AI has benefited from investment by companies that hope to find in it a new avenue for cutting costs, notably labour (Bessen et al. 2018) and transaction costs (Gurkaynak 2019; Lobel 2018), increasing outputs through rationalization of the production process (Acemoglu and Restrepo 2019), raising productivity (Brynjolfsson et al. 2019), managing the workforce in more efficient ways (Eubanks 2022),”

The displacement of labor by "so-so technologies" (e.g. self-checkout kiosks or automated phone systems) that offer little or no productivity gain, along with diminished worker voice due to intensified monitoring and surveillance, can be harmful to long-run productivity and other social goals like job satisfaction.

“While some amount of this is unavoidable, the displacement of labor by “so-so technologies” (e.g. self-checkout kiosks or automated phone systems) that offer little or no productivity gain, along with diminished worker voice due to intensified monitoring and surveillance, can be harmful to long-run productivity and other social goals like job satisfaction (65, 68).”

Support for research and development of human-complementary AI technologies could offer strong upsides for growth.

“Because the current path of research is biased toward automation (11, 68), support for research and development of human-complementary AI technologies could offer strong upsides for growth.”

The current path of research is biased toward automation.

“Because the current path of research is biased toward automation (11, 68), support for research and development of human-complementary AI technologies could offer strong upsides for growth.”