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The Race between Education and Technology Revisited

Paper Session

Saturday, Jan. 4, 2020 2:30 PM - 4:30 PM (PDT)

Marriott Marquis, San Diego Ballroom B
Hosted By: American Economic Association
  • Chair: Lawrence Katz, Harvard University

Extending The Race between Education and Technology

David Autor
,
Massachusetts Institute of Technology
Claudia Goldin
,
Harvard University
Lawrence Katz
,
Harvard University

Abstract

The canonical framework of the race between education and technology augmented with institutional changes at key historical junctures does a reasonable job of explaining U.S. wage structure changes over the 20th century emphasizing secular increases in the demand for more-educated workers from skill-biased technological change combined with variation in the rate of growth of the supply of skills from changes in access to education. We push the framework backwards to understand changes in U.S. occupational wage differentials in the 19th century. And we examine how the framework needs to be augmented to understand changes in the 21st century U.S. wage structure including the convexification of returns to education and divergent paths of upper-half and bottom-half wage inequality.

COLLEGE ATTAINMENT, INCOME INEQUALITY, AND ECONOMIC SECURITY: A SIMULATION EXERCISE

Brad Hershbein
,
W.E. Upjohn Institute for Employment Research
Melissa Kearney
,
University of Maryland

Abstract

We simulate the effect that increasing rates of educational attainment -- focusing on associate and bachelor’s degree completion - would have on various measures of U.S. economic security and income inequality. The simulation uses parameter estimates of educational attainment impacts from existing studies and applies them to population data. 

Automation, New Tasks, and Inequality

Daron Acemoglu
,
Massachusetts Institute of Technology
Pascual Restrepo
,
Boston University

Abstract

Automation, which substitutes capital for labor in tasks previously performed by humans, can increase the demand for skills because the workers specializing in at-risk tasks tend to be lower skill. The creation of new tasks in which humans have a competitive advantage tends to counterbalance the effects of automation by reinstating labor into new activities, but to the extent that more skilled workers are the ones performing new tasks, this may also contribute to a greater demand for skills and higher inequality. We establish that both automation and new task indeed contribute to higher demand for skills. We follow the methodology of Acemoglu and Restrepo (2019) to infer measures of displacement caused by automation and reinstatement generated by new tasks at the industry level and then show that both of these are positively correlated with the wage bill of more skilled workers in these industries. We then discuss what types of technological and organizational changes may help keep the demand for skills and inequality in check.

Structural Increases in Skill Demand after the Great Recession

David Deming
,
Harvard University

Abstract

This paper shows that employer demand for education increased markedly during the Great Recession, and has remained persistently higher through 2019. We find the largest increase in education requirements in professional, managerial and technical occupations, and in high-wage cities.
Discussant(s)
John Michael Van Reenen
,
Massachusetts Institute of Technology
Sandra E. Black
,
Columbia University
Chad Jones
,
Stanford University
Nicole Fortin
,
University of British Columbia
JEL Classifications
  • J3 - Wages, Compensation, and Labor Costs