How economics thinks about technology and labor

A recent David Autor review paper sums up the evolution:

I began by asking what the role of technology—digital or otherwise—is in determining wages and shaping wage inequality. I presented four answers corresponding to four strands of thinking on this topic: the education race, the task-polarization model, the automation-reinstatement race, and the era of AI uncertainty. The nuance of economic understanding has improved substantially across these epochs. Yet, traditional economic optimism about the beneficent effects of technology for productivity and welfare has eroded as understanding has advanced. Fundamentally, technological change expands the frontier of human possibilities, but one should expect it to create many winners and many losers, and to pose vast societal challenges and opportunities along the way.

What are the policy implications of these observations? The question is so broad that almost any answer is bound to appear vague and inadequate. One can reliably predict that technological innovations will foster new ways of accomplishing existing work, new business models, and entirely new industries, and these in turn will generate new jobs and spur some productivity gains. But absent complementary institutional investments, technological innovation alone will not generate broadly shared gains. Autor et al. (2022) sketch a long-form policy vision of what form these investments may take, focusing on three domains: education and training; labor market institutions; and innovation policy itself.

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