Demographics and Automation

94 Pages Posted: 13 Mar 2018

See all articles by Daron Acemoglu

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Pascual Restrepo

Boston University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 7, 2018

Abstract

We argue theoretically and document empirically that aging leads to greater (industrial) automation, and in particular, to more intensive use and development of robots. Using US data, we document that robots substitute for middle-aged workers (those between the ages of (36 and 55). We then show that demographic change — corresponding to an increasing ratio of older to middle-aged workers — is associated with greater adoption of robots and other automation technologies across countries and with more robotics-related activities across US commuting zones. We also provide evidence of more rapid development of automation technologies in countries undergoing greater demographic change. Our directed technological change model further predicts that the induced adoption of automation technology should be more pronounced in industries that rely more on middle-aged workers and those that present greater opportunities for automation. Both of these predictions receive support from country industry variation in the adoption of robots. Our model also implies that the productivity implications of aging are ambiguous when technology responds to demographic change, but we should expect productivity to increase and labor share to decline relatively in industries that are most amenable to automation, and this is indeed the pattern we find in the data.

Keywords: aging, automation, demographic change, economic growth, directed technological change, productivity, robots, tasks, technology

JEL Classification: J11, J23, J24, O33, O47, O57

Suggested Citation

Acemoglu, Daron and Restrepo, Pascual, Demographics and Automation (March 7, 2018). MIT Department of Economics Working Paper No. 18-05. Available at SSRN: https://ssrn.com/abstract=3138621 or http://dx.doi.org/10.2139/ssrn.3138621

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Pascual Restrepo

Boston University - Department of Economics ( email )

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