Not All Technological Change Is Equal: Disentangling Labor Demand Effects of Automation and Parts Consolidation
65 Pages Posted: 3 Dec 2018 Last revised: 6 Dec 2019
Date Written: November 25, 2019
We measure the labor-demand effects of two simultaneous forms of technological change—automation of production processes and consolidation of parts. We collect detailed shop-floor data from four semiconductor firms with different levels of automation and consolidation. Using the O*NET survey instrument, we collect novel task data for operator laborers that contains process-step level skill requirements, including operations and control, near vision, and dexterity requirements. We then use an engineering process model to separate the effects of the distinct technological changes on these process tasks and operator skill requirements. Within an occupation, we show that aggregate measures of technological change can mask the opposing skill biases of multiple simultaneous technological changes. In our empirical context, automation polarizes skill demand as routine, codifiable tasks requiring low and medium skills are executed by machines instead of humans, while the remaining and newly created human tasks tend to require low and high skills. Consolidation converges skill demand as formerly divisible low and high skill tasks are transformed into a single indivisible task with medium skill requirements and higher cost of failure.
Keywords: automation, consolidation, manufacturing, technological change, skill demand, optoelectronic semiconductors, engineering process model, labor demand
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