Technological Change, Automation and Employment: A Short Review of Theory and Evidence

Abstract

A selective survey of recent papers in the area of technological change, automation and employment is presented. The objective is to convey analytical ideas and the empirical evidence that have informed studies in this area of contemporary policy relevance. Automation occurs when a machine does work that might previously have been done by a person. How robots and automation affect the availability of jobs for labor force? There are very few emerging studies that address the issue with detailed data on robots usage and employment in different sectors of the economy. Based on our review of available studies and empirical evidence the following statements can be made: (1) Increasing automation and robots adoption do not seem to cause loss of employment in the aggregate (2) Low skilled workers in routine jobs are more likely to suffer job losses. (3) There will be demand for new types of skilled workers or new specializations within occupations. Prospective automation intensifies the degree of uncertainty in labor markets across countries.