Automation and Rent Dissipation: Implications for Inequality, Productivity, and Welfare
On November 13, the evening before being presented with the A.SK Social Science Award at the WZB, the renowned economist Daron Acemoglu will give a specialized talk for his peers and anyone interested in the subject matter:
Daron Acemoglu has studied the effects of automation technologies in economies with labor market distortions where workers earn rents on their jobs, and can show that automation is targeted at high-rent jobs. This creates rent dissipation, reducing wages for displaced workers and aggregate total factor productivity (TFP) beyond their competitive effects. It also implies that automation reduces wage dispersion among equal workers. Using data for the US from 1980 to 2016, Acemoglu and his co-authors provide empirical evidence consistent with the rent dissipation mechanism. They show how the general equilibrium effects of automation accounting for rent dissipation can be estimated. The results suggest that the baseline (“competitive”) effects of automation account for 44% of the increase in between-group inequality in the US since 1980, while rent dissipation adds another 16% to this number. It is estimated that automation brought a small reduction in TFP and (utilitarian) welfare gains on net since 1980.
Daron Acemoglu is Institute Professor of Economics at the Massachusetts Institute of Technology. He will receive the A.SK Social Science Award, one of the most prestigious awards in this field, the following day, on November 14. Anyone more interested in a general introduction to his research as well as in his acceptance speech is welcome to register for the Award Ceremony.
The data protection notice on photo and film recordings can be found here.
The venue is wheelchair accessible. Please let Friederike Theilen-Kosch (friederike.theilen-kosch [at] wzb.eu) know if you need special assistance.