A Networks perspective for Automation
Recent developments in automation capabilities have raised concerns about future job losses and the reallocation of workers. Previous studies have estimated the probability of automation in different occupations; with these probabilities, they have assessed the impact of automation on employment. However, these studies do not consider second-order effects, that is, the impact unemployed workers in one occupation have on the labour supply in a similar occupation. In this work, we evaluate such second-order effects using a network perspective. We develop a labour market model embedded in a network, where nodes are occupations and edges link occupations that are similar enough for a worker to transition between them. We characterize each node or occupation by its position in the network and its employment and vacancy rates. We then study how workers reallocate after an automation shock that decreases labour demand in some occupation and increases it in others. After discussing the model’s ability to reproduce the Beveridge curve and relating it to standard partial equilibrium models, we study the wedge between labour supply and demand at the occupation level. Our analysis suggests that second-order effects due to reallocation can be crucial to determine unemployment and the pressure on wages at the occupation level. Such outcomes depend not only on an occupation’s risk of being automated, but also on the probability of automation of related occupations and the mobility constraints that the structure of the labour flow network adds.
Date:
26 April 2018, 15:00 (Thursday, 1st week, Trinity 2018)
Venue:
Eagle House, Walton Well Road OX2 6ED
Venue Details:
INET Oxford Ground Floor meeting room
Speaker:
Rita Maria del Rio Chanona (Doctoral Student, Mathematical Institute and INET Oxford Complexity Economics Programme)
Organising department:
Institute for New Economic Thinking
Organiser:
Susan Mousley (INET Oxford Admin Team)
Organiser contact email address:
info@inet.ox.ac.uk
Host:
Susan Mousley (INET Oxford Admin Team)
Part of:
INET Oxford Researcher Seminars
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Susan Mousley
