Benign Effects of Automation: New Evidence from Patent Texts
48 Pages Posted: 27 Apr 2017 Last revised: 18 Aug 2018
Date Written: August 15, 2018
We provide a new measure of automation based on patents and study its employment effects. Classifying all U.S. patents granted between 1976 and 2014 as automation or non-automation patents, we document a strong rise in both the absolute number and the share of automation patents. 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. 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. Our findings are robust to weighting patents by the number of their citations or focusing exclusively on patents by governments, research institutions or foreign assignees.
Keywords: automation, employment, labor demand, innovation, patents, local labor markets
JEL Classification: J23, O34,R23, C81
Suggested Citation: Suggested Citation