Benign Effects of Automation: New Evidence from Patent Texts
37 Pages Posted: 27 Apr 2017 Last revised: 22 Sep 2017
Date Written: September 22, 2017
We provide a new measure of automation based on patent texts and study its impact on employment. Classifying all 5 million U.S. patents granted between 1976 and 2014 as automation or non-automation patents, we document a rise in the share of automation patents from 25 percent to 67 percent. We link patents to the industries of their use and, through local industry structure, to commuting zones. According to our estimates, advances in national automation technology have a positive influence on employment in local labor markets. There is substantial heterogeneity in effects, however: Manufacturing employment declines, but this is more than compensated by service sector job growth. Commuting zones with more people working in routine occupations fare worse.
Keywords: automation, employment, labor demand, innovation, patents, local labor markets
JEL Classification: J23, O34, O31, R23, C81
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