Not all Technologies are Equal: Measuring and Disentangling the Labor Effects of Technology Change in Manufacturing

Carnegie Mellon University, Pittsburgh PA

Investigators

Abstract

Manufacturing in the US is affected by powerful economic forces, such as globalization and technological change, that have dramatically changed labor market outcomes for workers. Despite growth in the value of U.S. manufacturing, the number of manufacturing workers in the U.S. has declined, with fewer middle-income jobs and displaced workers experiencing large losses in earnings. Leveraging new empirical data and methods, we anticipate the effects of current and emerging technologies on labor outcomes with a precision that provides meaningful insights for training programs and for workforce policies that can mitigate related labor market failures. Significant literature exists on technological change and its influence on employment, wages, and productivity. This literature suggests that technology change causes a shift away from routine tasks and towards disproportionate wage gains for workers with higher skills. The research to-date, however, has largely been unable to distinguish between different types of technology change, and the possible relation to wages and employment. Further, the economic approach linking policy and technical change has been mostly limited to historical and aggregated (e.g., regional or national) data. These approaches are unable to characterize the consequences of emerging technology changes at individual manufacturing steps and the consequences for labor at very fine levels of required skills, training, and competencies. This coarseness in modelling provides a challenge to the design of effective training policies and limits the ability to understand the impact of emerging technologies on the specific skills required for workers. We propose new methods and present novel empirical data to address these issues and anticipate the labor market effects of emerging technologies. Specifically, we seek to anticipate (i) how emerging technologies affect productivity, wages, and employment; (ii) the implications for state-of-the-art economic production functions, and (iii) labor market failures that may be particularly severe in the presence of disruptive technological change. This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.