As robots and other computer-assisted technologies take over tasks previously performed by labour, there is increasing concern about the future of jobs and wages. This column discusses evidence that industrial robots reduced employment and wages between 1990 and 2007. Estimates suggest that an extra robot per 1,000 workers reduces the employment to population ratio by 0.18-0.34 percentage points and wages by 0.25-0.5%. This effect is distinct from the impacts of imports, the decline of routine jobs, offshoring, other types of IT capital, or the total capital stock.
This is only a first step. Alternative strategies for estimating the aggregate implications of the spread of robots and other labour-replacing technologies would complement our approach.
We believe as well that the negative effects we estimate are both interesting and surprising, because of the small offsetting employment increases in other industries and occupations. So far, there are relatively few robots in the US economy, and so the number of jobs lost due to robots has been limited to between 360,000 and 670,000 jobs. If the robots spread as predicted, future aggregate job losses will be much larger. For example, BCG (2015) has an ‘aggressive’ scenario in which the world stock of industrial robots would quadruple by 2025. In our estimates, that would imply a 0.94-1.76 percentage points lower employment to population ratio, and 1.3-2.6% lower wage growth between 2015 and 2025. These are sizable effects. But it should also be noted that even under the most aggressive scenario, we are talking about a relatively small fraction of employment in the US economy being affected by robots. There is nothing here to support the view that new technologies will make most jobs disappear and humans largely redundant.