Automation, Deskilling, and Labor Supply: Empirical Evidence

Abstract

We investigate the effect of automation of cognitively demanding tasks in job design ("technological deskilling") on job amenities and labor supply. Technological deskilling can enhance fit between job task requirements and worker's skill, which is motivating and increases psychological flow. Empirical evidence from two large occupations accords with the theory of task-skill fit. Conventionally, supermarket cashiers scan purchases and collect payments. In a supermarket which automated the payments task, cashiers valued the new job design at 4.1 percent of wages and increased labor supply by 11 percent. Ride hail drivers must find their way and drive. Absent map apps to automate the way-finding task, drivers with poor road knowledge were three times less likely to work than those with good road knowledge. Managers facing a labor crunch in front-line workers should consider technologically deskilling jobs to increase amenities and labor supply, and underpin a low-cost strategy.

Keywords: Automation; Technological deskilling; Work design; Job quality; Labor supply

JEL Classification: O33, M5, J3