"Demographics and Automation"

by Acemoglu, Daron; Restrepo, Pascual (2018)

Abstract

We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of 36 and 55). We then show that demographic change—corresponding to an increasing ratio of older to middle-aged workers—is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country-industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data.

Key Passage

In this paper, we advance the hypothesis that cross-country differences in automation are at least in part explained by differential demographic trends, and emphasize the productivity implications of automation induced by demographics. Focusing on robotics where we have access to comparable data, the United States, and to some degree the United Kingdom, are lagging behind in robotics because they are not aging as rapidly as Germany, Japan and South Korea. This is not because of differential demand for robots and automation in the service sector in countries undergoing rapid aging—our focus is on the manufacturing sector. Rather, we document that this pattern reflects the response of firms to the relative scarcity of middle-aged workers, who appear to be most substitutable for robots. (p.1)

Keywords

Automation, Technology, Robots, Technological Change, Demographic Change

Themes

Automation

Links to Reference

• http://www.nber.org/papers/w24421
• http://dx.doi.org/10.3386/w24421
• https://www.nber.org/papers/w24421
• https://www.nber.org/system/files/working_papers/w24421/w24421.pdf

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