Racing With or Against the Machine? Evidence on the Role of Trade in Europe | Zendy

Terry Gregory | Zendy; Anna Salomons | Zendy; Ulrich Zierahn | Zendy

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Racing With or Against the Machine? Evidence on the Role of Trade in Europe

Author(s) -

Terry Gregory,

Anna Salomons,

Ulrich Zierahn

Publication year - 2021

Publication title -

journal of the european economic association

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 7.792

H-Index - 93

eISSN - 1542-4774

pISSN - 1542-4766

DOI - 10.1093/jeea/jvab040

Subject(s) - economics , technological change , product (mathematics) , aggregate (composite) , aggregate demand , raising (metalworking) , labor demand , task (project management) , labour economics , distribution (mathematics) , industrial organization , macroeconomics , wage , engineering , mechanical engineering , monetary policy , mathematical analysis , materials science , geometry , mathematics , management , composite material

Digital technologies displace labor from routine tasks, raising concerns that labor is racing against the machine. We develop an empirically tractable task-based framework to estimate the aggregate employment effects of routine-replacing technological change (RRTC), along with the labor and product demand channels through which this aggregate effect comes about, focusing on the role of inter-regional trade. While RRTC has indeed had strong displacement effects in Europe between 1999 and 2010, it has simultaneously created new jobs through increased product demand, resulting in net employment growth. However, the distribution of gains from technological progress matters for its job-creating potential.

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