The threat of automation, another paper on the topic

A new NBER Working Paper by David E. Bloom, Mathew McKenna, Klaus Prettner  "Demography, Unemployment, Automation, and Digitalization: Implications for the Creation of (Decent) Jobs, 2010-2030"

Abstract:

Globally, an estimated 734 million jobs will be required between 2010 and 2030 to accommodate recent and ongoing demographic shifts, account for plausible changes in labour force participation rates, and achieve target unemployment rates of at or below 4 percent for adults and at or below 8 percent for youth. The facts that i) most new jobs will be required in countries where "decent" jobs are less prevalent and ii) workers in many occupations are increasingly subject to risks of automation further compound the challenge of job creation, which is already quite sizable in historical perspective.  Failure to create the jobs that are needed through 2030 would put currently operative social security systems under pressure and undermine efforts to guarantee the national social protection floors enshrined in the Sustainable Development Goals (SDGs).

Paper available for NBER members.

Hal Varian's new working paper on AI

A new NBER Working Paper by Hal Varian Artificial Intelligence, Economics, and Industrial Organization

Abstract:

Machine learning (ML) and artificial intelligence (AI) have been around for many years. However, in the last 5 years, remarkable progress has been made using multilayered neural networks in diverse areas such as image recognition, speech recognition, and machine translation.  AI is a general purpose technology that is likely to impact many industries.  In this chapter I consider how machine learning availability might affect the industrial organization of both firms that provide AI services and industries that adopt AI technology.   My intent is not to provide an extensive overview of this rapidly-evolving area, but instead to provide a short summary of some of the forces at work and to describe some possible areas for future research.

The Working Paper is available at NBER (gated).

"How to save humanity from the Malthusian destiny" resulting from AI

From the new NBER working paper by Anton Korinek, Joseph E. Stiglitz  titled, "Artificial Intelligence and Its Implications for Income Distribution and Unemployment."

Abstract:

Inequality is one of the main challenges posed by the proliferation of artificial intelligence (AI) and other forms of worker-replacing technological progress.  This paper provides a taxonomy of the associated economic issues:  First, we discuss the general conditions under which new technologies such as AI may lead to a Pareto improvement.  Secondly, we delineate the two main channels through which inequality is affected - the surplus arising to innovators and redistributions arising from factor price changes. Third, we provide several simple economic models to describe how policy can counter these effects, even in the case of a "singularity" where machines come to dominate human labor. Under plausible conditions, non-distortionary taxation can be levied to compensate those who otherwise might lose.  Fourth, we describe the two main channels through which technological progress may lead to technological unemployment via efficiency wage effects and as a transitional phenomenon. Lastly, we speculate on how technologies to create super-human levels of intelligence may affect inequality and on how to save humanity from the Malthusian destiny that may ensue.

Read the whole working paper here. (Gated)