Automation Versus Procreation, aka Bots Versus Tots
AbstractSeveral recent papers have considered the impact of automation on labor demand in the coming decades. But demand is only one side of the labor market: the supply of labor will also change dramatically in the next 50 years. The net outcome on wages and employment will depend on the relative magnitude of these shifts in demand and supply. I conclude that the expected demographic changes are of similar magnitude to forecasts of demand changes due to automation at least in the next 20 years.
The analysis first discusses a simple model of the labor market, and the changing relationship between jobs and tasks, including which tasks --- and which jobs --- will be automated and the role of education and training. Subsequent sections discuss productivity and the demographics of the US labor market, including historical trends in fertility and civilian labor force; how in other OECD countries workforce aging is correlated with heavy investments in automation/robotics; and the importance of analyzing both supply and demand of labor. Focusing on the demand side alone is misleading from a policy perspective.
Most jobs, even low level jobs, consist of a variety of tasks that are difficult to automate, so we can expect them to be with us for a long time. The demographic shifts, on the other hand, are hitting us in the near term future, and it is likely that we will see a tight labor market for decades to come. Increasing productivity, most likely with automation, will become increasingly important.