This paper was prepared for the December 12, 2019, conference on “Automation, Labor Market Institutions, and the Middle Class” for the Brookings Institution, Future of the Middle Class Initiative.
Progress in industrial robotics and information technologies has meant that advanced economies have experienced a signiﬁcant drop in the fraction of the population employed in middle wage, “routine task-intensive”occupations. Applying machine learning techniques, we identify the types of individuals who would otherwise be employed in such occupations, if not for advances in automation technology, and track their labor market outcomes. Based on these ﬁndings, we develop a quantitative, heterogeneous agent, general equilibrium model of labor force participation, occupational choice, and capital investment to study the aggregate and distributional effects of advancing automation. We use this framework as a laboratory to evaluate various public policies aimed at addressing the disappearance of routine employment and its consequent impacts on inequality.
Report Produced by Future of the Middle Class Initiative
The goal of the Future of the Middle Class Initiative is to improve the quality of life of America’s middle class and to increase the number of people rising to join its ranks. Through independent, non-partisan analysis and policy development, we seek to advance public understanding of challenges facing the middle class and barriers to upward mobility.