{"title":"Automation and job polarization","authors":"Chia-Hui Lu","doi":"10.1016/j.jmacro.2025.103673","DOIUrl":null,"url":null,"abstract":"<div><div>By introducing the development of automation into a labor search model with differently skilled workers, this paper finds that increased automation of production processes leads to job polarization. When there is an increase in the degree to which automation and middle-skilled labor can replace each other, firms producing final goods will use automation in place of human labor rather than the other way around. In economies where people can acquire skills and make endogenous occupational choices, government subsidies to cover the learning costs of high-skilled labor enhance output production and household welfare, but increase the degree of job polarization. Furthermore, we find that reducing job polarization is not necessarily beneficial for macroeconomic performance when the government subsidizes the cost of learning for household members to become middle-skilled workers.</div></div>","PeriodicalId":47863,"journal":{"name":"Journal of Macroeconomics","volume":"84 ","pages":"Article 103673"},"PeriodicalIF":1.3000,"publicationDate":"2025-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Macroeconomics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0164070425000102","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
By introducing the development of automation into a labor search model with differently skilled workers, this paper finds that increased automation of production processes leads to job polarization. When there is an increase in the degree to which automation and middle-skilled labor can replace each other, firms producing final goods will use automation in place of human labor rather than the other way around. In economies where people can acquire skills and make endogenous occupational choices, government subsidies to cover the learning costs of high-skilled labor enhance output production and household welfare, but increase the degree of job polarization. Furthermore, we find that reducing job polarization is not necessarily beneficial for macroeconomic performance when the government subsidizes the cost of learning for household members to become middle-skilled workers.
期刊介绍:
Since its inception in 1979, the Journal of Macroeconomics has published theoretical and empirical articles that span the entire range of macroeconomics and monetary economics. More specifically, the editors encourage the submission of high quality papers that are concerned with the theoretical or empirical aspects of the following broadly defined topics: economic growth, economic fluctuations, the effects of monetary and fiscal policy, the political aspects of macroeconomics, exchange rate determination and other elements of open economy macroeconomics, the macroeconomics of income inequality, and macroeconomic forecasting.