Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model

The advent of artificial intelligence is changing the task allocation of workers and machines in firms' production processes with potentially wide ranging effects on workers and firms. We develop an agent-based simulation framework to investigate the consequences of different types of automatio...

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Bibliographic Details
Published in:Journal of evolutionary economics 2023-01, Vol.33 (1), p.35-63
Main Authors: Dawid, Herbert, Neugart, Michael
Format: Article
Language:English
Subjects:
Artificial intelligence
Automation
Change agents
Companies
Competitiveness
Consumption
Economic Growth
Economic Theory/Quantitative Economics/Mathematical Methods
Economics
Economics and Finance
Employment
Entrepreneurship
Firm dynamics
Income distribution
Inequality
Institutional/Evolutionary Economics
Investigations
Job creation
Labor economics
Labor market
Macroeconomics
Market entry
Microeconomics
Occupations
Productivity
R & D/Technology Policy
Regular Article
Simulation
Skills
Task allocation
Tasks
Technological change
Wage inequality
Wages & salaries
Workers
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Summary:The advent of artificial intelligence is changing the task allocation of workers and machines in firms' production processes with potentially wide ranging effects on workers and firms. We develop an agent-based simulation framework to investigate the consequences of different types of automation for industry output, the wage distribution, the labor share, and industry dynamics. It is shown how the competitiveness of markets, in particular barriers to entry, changes the effects that automation has on various outcome variables, and to which extent heterogeneous workers with distinct general skill endowments and heterogeneous firms featuring distinct wage offer rules affect the channels via which automation changes market outcomes.
ISSN:1432-1386
0936-9937
1432-1386
DOI:10.1007/s00191-022-00803-5