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How Computer Automation Affects Occupations: Technology, Jobs, and Skills

46 Pages Posted: 15 Nov 2015 Last revised: 4 Oct 2016

James E. Bessen

Boston University - School of Law; Research on Innovation

Date Written: October 3, 2016


This paper investigates basic relationships between technology and occupations. Building a general occupational model, I look at detailed occupations since 1980 to explore whether computers are related to job losses or other sources of wage inequality. Occupations that use computers grow faster, not slower. This is true even for highly routine and mid-wage occupations. Estimates reject computers as a source of significant net technological unemployment or job polarization. But computerized occupations substitute for other occupations, shifting employment and requiring new skills. Because new skills are costly to learn, computer use is associated with substantially greater within-occupation wage inequality.

Keywords: technology, automation, human capital, job polarization, occupations, wage inequality

JEL Classification: O33, J24, J31

Suggested Citation

Bessen, James E., How Computer Automation Affects Occupations: Technology, Jobs, and Skills (October 3, 2016). Boston Univ. School of Law, Law and Economics Research Paper No. 15-49. Available at SSRN: or

James Bessen (Contact Author)

Boston University - School of Law ( email )

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Research on Innovation ( email )

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