Behind the Headline Number: Why not to Rely on Frey and Osborne’s Predictions of Potential Job Loss from Automation

31 Pages Posted: 22 Oct 2019 Last revised: 7 Nov 2019

See all articles by Michael Bernard Coelli

Michael Bernard Coelli

The University of Melbourne

Jeff Borland

University of Melbourne - Department of Economics

Date Written: October 21, 2019

Abstract

We review a highly influential study that estimated potential job loss from advances in Artificial Intelligence and robotics: Frey and Osborne (FO) (2013, 2017) concluded that 47 per cent of jobs in the United States were at ‘high risk’ of automation in the next 10 to 20 years. First, we investigate FO’s methodology for estimating job loss. Several major problems and limitations are revealed; especially associated with the subjective designation of occupations as fully automatable. Second, we examine whether FO’s predictions can explain occupation-level changes in employment in the United States from 2013 to 2018. Compared to standard approaches which classify jobs based on their intensity in routine tasks, FO’s predictions do not ‘add value’ for forecasting the impact of technology on employment.

Keywords: employment; technology; prediction; job loss; AI and robotics

JEL Classification: J21, O33

Suggested Citation

Coelli, Michael Bernard and Borland, Jeff, Behind the Headline Number: Why not to Rely on Frey and Osborne’s Predictions of Potential Job Loss from Automation (October 21, 2019). Melbourne Institute Working Paper No. 10/19, October 2019, Available at SSRN: https://ssrn.com/abstract=3472764 or http://dx.doi.org/10.2139/ssrn.3472764

Michael Bernard Coelli (Contact Author)

The University of Melbourne ( email )

Melbourne, 3010
Australia
+61 3 8344 8586 (Phone)
+61 3 8344 6899 (Fax)

Jeff Borland

University of Melbourne - Department of Economics ( email )

Victoria 3010, 3010
Australia

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