Artificial Intelligence, Automation and Work

Daron Acemoglu and Pascual Restrepo

NBER Working Paper

2018

We summarize a framework for the study of the implications of automation and AI on the demand for labor, wages, and employment. Our task-based framework emphasizes the displacement eﬀect that automation creates as machines and AI replace labor in tasks that it used to perform. This displacement eﬀect tends to reduce the demand for labor and wages. But it is counteracted by a productivity eﬀect, resulting from the cost savings generated by automation, which increase the demand for labor in non-automated tasks. The productivity eﬀect is complemented by additional capital accumulation and the deepening of automation (improvements of existing machinery), both of which further increase the demand for labor. These countervailing eﬀects are incomplete. Even when they are strong, automation increases output per worker more than wages and reduce the share of labor in national income. The more powerful countervailing force against automation is the creation of new labor-intensive tasks.