March 31, 2017
The Robots Are Coming And Cutting Employment

Daron Acemoglu of MIT and Pascual Restrepo of Boston University find that robots really do decrease human employment.

As robots and other computer-assisted technologies take over tasks previously performed by labor, there is increasing concern about the future of jobs and wages. We analyze the effect of the increase in industrial robot usage between 1990 and 2007 on US local labor markets. Using a model in which robots compete against human labor in the production of different tasks, we show that robots may reduce employment and wages, and that the local labor market effects of robots can be estimated by regressing the change in employment and wages on the exposure to robots in each local labor marketódefined from the national penetration of robots into each industry and the local distribution of employment across industries. Using this approach, we estimate large and robust negative effects of robots on employment and wages across commuting zones. We bolster this evidence by showing that the commuting zones most exposed to robots in the post-1990 era do not exhibit any differential trends before 1990. The impact of robots is distinct from the impact of imports from China and Mexico, the decline of routine jobs, offshoring, other types of IT capital, and the total capital stock (in fact, exposure to robots is only weakly correlated with these other variables). According to our estimates, one more robot per thousand workers reduces the employment to population ratio by about 0.18-0.34 percentage points and wages by 0.25-0.5 percent.

Factory robots can replace multiple workers. But the replacement ratio will depend heavily on the job. An autonomous vehicle system could in theory replace multiple workers even though there is one autonomous vehicle system per car or truck the vehicle would operate 24x7.

No surprise that blue collar routine manual work is hardest hit.

We also document that the employment effects of robots are most pronounced in manufacturing, and in particular, in industries most exposed to robots; in routine manual, blue collar, assembly and related occupations; and for workers with less than college education. Interestingly, and perhaps surprisingly, we do not find positive and offsetting employment gains in any occupation or education groups.

The number of industries exposed to robots will rise sharply in the coming years. Restaurants will become ripe for robotic takeover as robotic cooks become competitive in restaurants and order-taking becomes increasingly done via tablets and cell phones. Autonomous vehicle control will mature to enable replacement of humans in taxis and long haul trucks. I expect restaurants and transportation will both extensively automate in the 2020s. Ditto stores and warehouse.

Construction is messy and much more difficult to automate than manufacturing. But the robots are coming to construction too and already there is an ancient construction occupation threatened by robots: bricklaying. The Construction Robotics Sam100 robot can lay bricks 6 times faster than a human. Researchers at the Swiss Federal Institute of Technology claim their In-Situ Fabricator can lay bricks 20 times faster than humans.

On the bright side, cheaper construction will lower housing costs, at least where no NIMBY (Not In My Back Yard) regulations block construction. So anyone who can manage to stay competitive in the labor market will be able to buy bigger houses.

Share |      Randall Parker, 2017 March 31 06:25 PM 

Tj Green said at April 1, 2017 4:16 AM:

With robots providing us with our food and shelter, our future will become one big party with endless holidays. Robots will explore the cosmos, and with the information they send back we can explore it in virtual reality to assess if it suitable for colonization. With powerful life extension therapies arriving next year the future is looking good.

Marcel F. Williams said at April 1, 2017 8:35 AM:

Increasing automation was supposed to usher in a new era of leisure time for the work force. Yet we still have a 40 hour work week instead of a 32 hour work week. And America is still one of the few advanced nations that doesn't Federally mandate payed vacation time. And one out of four American workers get no paid vacations-- at all!


Lono said at April 1, 2017 12:33 PM:

[Hey Lono, do not put a fake unused domain in URL field. It triggers ant-spam measure on your comment and then I have to delete the fake domain and approve your comment manually]


Yes, this is one possible future.

In the right hands mankind may go far indeed.

The question is - will people wake up in time to support the philosopher kings who are ready to lead them to this potential promised land?

We should all make sure to put our money where out mouths are - because without materially supporting the right groups - we will see many more cycles of the rise and fall of nations - before we reach a second Renaissance.

Good luck!

bmack500 said at August 1, 2017 12:51 PM:

Well Tj Green,

As far as life extension therapies arriving next year, would it be safe to assume you are speaking of senescent cell removal tech, for example oisin? If not, what? Next year seems fairly optimistic.

Please elaborate...

Tj Green said at September 12, 2017 5:25 PM:

bmack500 Unity biotechnology should have senescent cell clearance therapies by next year (2018). They're in collaboration with Ascentage pharma. They might not be using dasatinib and quercetin so there might be a slight delay.

Post a comment
Name (not anon or anonymous):
Email Address:
Remember info?

Go Read More Posts On FuturePundit
Site Traffic Info
The contents of this site are copyright ©