Robots: Curse or Blessing? A Basic Framework

29 Pages Posted: 13 Apr 2015 Last revised: 8 Aug 2015

See all articles by Jeffrey D. Sachs

Jeffrey D. Sachs

Columbia University - Columbia Earth Institute; National Bureau of Economic Research (NBER)

Seth Benzell

Chapman University - The George L. Argyros School of Business & Economics; MIT Initiative on the Digital Economy; Stanford University, Human-Centered Artificial Intelligence Digital Economy Lab

Guillermo Lagarda

Global Development Policy Center Boston University

Date Written: April 2015

Abstract

Do robots raise or lower economic well-being? On the one hand, they raise output and bring more goods and services into reach. On the other hand, they eliminate jobs, shift investments away from machines that complement labor, lower wages, and immiserize workers who cannot compete. The net effect of these offsetting forces is unclear. This paper seeks to clarify how economic outcomes, positive or negative, depend both on specific parameters of the economy and public policy. We find that a rise in robotic productivity is more likely to lower the welfare of young workers and future generations when the saving rate is low, automatable and non-automatable goods are more substitutable in consumption, and when traditional capital is a more important complement to labor. In some parameterizations the relationship of utility to robotic productivity follows a “noisy U” as large innovations are long-run welfare improving even though small innovations are immiserizing. Policies that redistribute income across generations can ensure that a rise in robotic productivity benefits all generations.

Suggested Citation

Sachs, Jeffrey D. and Benzell, Seth and Lagarda, Guillermo, Robots: Curse or Blessing? A Basic Framework (April 2015). NBER Working Paper No. w21091, Available at SSRN: https://ssrn.com/abstract=2593670

Jeffrey D. Sachs (Contact Author)

Columbia University - Columbia Earth Institute ( email )

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Seth Benzell

Chapman University - The George L. Argyros School of Business & Economics ( email )

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MIT Initiative on the Digital Economy ( email )

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Stanford University, Human-Centered Artificial Intelligence Digital Economy Lab ( email )

Stanford, CA 94305
United States

Guillermo Lagarda

Global Development Policy Center Boston University ( email )

53 Bay State Road
Boston, MA 02215
United States

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