Effects of Technological Change and Automation on Industry Structure and (Wage-)Inequality: Insights from a Dynamic Task-Based Model

30 Pages Posted: 7 Dec 2021 Last revised: 18 Jan 2022

See all articles by Herbert Dawid

Herbert Dawid

Bielefeld University - Department of Business Administration and Economics; Center for Mathematical Economics

Michael Neugart

Technical University of Darmstadt

Date Written: October 1, 2021

Abstract

The advent of artificial intelligence is changing the task allocation of workers and machines in firms' production processes with potentially wide ranging effects on workers and firms. We develop an agent-based simulation framework to investigate the consequences of different types of automation for industry output, the wage distribution, the labor share, and industry dynamics. It is shown how the competitiveness of markets, in particular barriers to entry, changes the effects that automation has on various outcome variables, and to which extent heterogeneous workers with distinct general skill endowments and heterogeneous firms featuring distinct wage offer rules affect the channels via which automation changes market outcomes.

Keywords: automation, artificial intelligence, tasks, wage inequality, firm dynamics

JEL Classification: C63, L10, J31, O33

Suggested Citation

Dawid, Herbert and Neugart, Michael, Effects of Technological Change and Automation on Industry Structure and (Wage-)Inequality: Insights from a Dynamic Task-Based Model (October 1, 2021). Bielefeld Working Papers in Economics and Management, Available at SSRN: https://ssrn.com/abstract=3978479 or http://dx.doi.org/10.2139/ssrn.3978479

Herbert Dawid (Contact Author)

Bielefeld University - Department of Business Administration and Economics ( email )

P.O. Box 100131
D-33501 Bielefeld, NRW 33501
Germany
+49-521-1064843 (Phone)
+49-521-1062994 (Fax)

Center for Mathematical Economics ( email )

Postfach 10 01 31
Bielefeld, D-33501
Germany

Michael Neugart

Technical University of Darmstadt ( email )

Hochschulstraße 1
Darmstadt, 64289
Germany

HOME PAGE: http://www.vwl3.wi.tu-darmstadt.de

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
105
Abstract Views
489
Rank
473,206
PlumX Metrics