Technology and Labor Displacement: Evidence from Linking Patents with Worker-Level Data
95 Pages Posted: 6 May 2020 Last revised: 27 Nov 2023
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Technology and Labor Displacement: Evidence from Linking Patents with Worker-Level Data
Technology, Vintage-Specific Human Capital, and Labor Displacement: Evidence from Linking Patents with Occupations
Date Written: November 1, 2023
Abstract
We develop measures of labor-saving and labor-augmenting technology exposure using textual analysis of patents and job tasks. Using US administrative data, we show that both measures negatively predict earnings growth of individual incumbent workers. While labor-saving technologies predict significant earnings declines and higher likelihood of job loss for all workers, labor-augmenting technologies primarily predict losses for older or highly-paid workers. However, we find a positive effect of labor-augmenting technologies on total worker compensation and employment. A model featuring automation and vintage-specific human capital quantitatively matches these patterns. We extend our analysis to predict the effect of AI on wages.
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