Automation and Unemployment: Help is in the Way

This paper presents a model of technical change that combines two lines of research together. It is a task based model, in which automation turns labor tasks to mechanized ones, and there is also a continuous addition of new labor tasks, as in the expanding variety literature. We impose three simple restrictions on the model. The first is that all new tasks are adopted. The second is that all new automations are adopted and the third is that the share of labor does not converge to zero in the long run. We show that these restrictions imply that unemployment due to automation is expected to converge to zero over time.

Joint work with Hideki Nakamura.