The use of robots: implications on the labor market

Anxieties about technology can manifest in various ways, with one common concern being the fear of technological unemployment resulting from the replacement of human workers with machines. The prevailing perception seems to be the substitutability of humans with machines that reach a new and unprecedented quality. But does automation represent solely and exclusively a threat to human labor? In reality, even if automation displaces workers, it’s often offset by increased productivity, which, in turn, raises the demand for labor in various sectors, including those undergoing automation. Additionally, automation periods often coincide with the emergence of new job opportunities, a phenomenon known as the ”reinstatement effect”. Even in the presence of these productivity effects, technological unemployment can occur, in particular, when workers lose their jobs and lack the necessary skills for available roles, they must undergo training. Then, the spell of their unemployment will depend on the time needed to acquire the skills required to be able to switch to another occupation. Then one important question arises: What is the average training time required to transition from one occupation to another? In Chapter Two of this thesis, we answer this research question by calculating the average training time required to bridge the skill gap when transitioning from one occupation to another. This is the first important perspective we consider in this thesis to study the technological unemployment phenomenon however, this is not a unique one. In fact, as mentioned earlier, concerns about technology, especially robots, potentially rendering human labor obsolete have gained prominence. While certain occupations are identified as vulnerable to automation, the extent of susceptibility depends on the number of tasks that robots can perform and their significance within each occupation. Chapter Three of this thesis analyzes this second perspective and tackles the question of occupation susceptibility to automation by developing a measure of occupation replaceability by robots, focusing on the specific tasks that robots can undertake within each occupation. The results obtained from the evidence in Chapters Two and Chapter Three of this thesis inspire the desire to theoretically study the problem of technological unemployment under the two perspectives we mentioned. In Chapter Four, we present a multi-occupational model in which each occupation is defined by a series of tasks and technological change comes with the increase in tasks that can be performed by robots, also transitioning from one occupation to another is costly and time consuming in terms of training as the agent will have to endure a period of unemployment.