Economics Dictionary of ArgumentsHome
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| Automation: In economics, automation refers to the use of technology, such as robots and computer systems, to perform tasks with minimal or no human intervention. Its main economic impacts include increased productivity, lower production costs, and potentially enhanced product quality. However, it also raises concerns about job displacement, the need for new skills, and its effects on wage inequality. See also Robots, Technology, Computer, Labor, Work, Jobs, Wages, Relative wage, Skilled labor._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Robert C. Feenstra on Automation - Dictionary of Arguments
Feenstra I 4-33 Automation/computers/Feenstra: Measuring computer services and other high-tech capital as a share of the capital stock using ex post rental prices, we see they account for 13% of the shift towards nonproduction labor. Measuring these shares using ex ante rental prices, we see that that computers and other high-tech capital explain only 8% of this shift. >Skilled labour, >Relative wage, >Wage gap. Feenstra I 4-34 In both cases, the contribution of computers and other high-tech capital is less than the contribution of outsourcing. In contrast, when computers are measured by their share of investment (and the high-technology capital share is also included), we see that these variables account for 31% of the shift toward nonproduction labor, which exceeds the contribution of outsourcing. Thus, whether outsourcing is more or less important than computers depends on whether the latter are measured as a share of the capital stock, or as a share of investment. >Capital, >Capital stock, >Capital structure. Regardless of the specification, however, it is fair to conclude that both outsourcing and expenditure on computers and other high technology capital are important explanations of the shift towards nonproduction labor in the U.S., with their exact magnitudes depending on how they are measured. >Outsourcing. Feenstra I 4-43 (…) both outsourcing and capital upgrading contributed to rising wage inequality in the 1980s. Ex ante/ex post: For example, when the share of the capital stock devoted to computers is measured using ex post rental prices, then outsourcing accounts for 15% of the increase in the relative wage of nonproduction workers while computers account for 35% of this increase; thus, computers are twice as important as outsourcing. Feenstra I 4-44 When instead the computer share of the capital stock is measured using ex ante rental prices, then outsourcing explains about 25% while computers explain about 20% of the increase in the relative wage. However, when the computer share of investment is used, then the contribution of outsourcing falls to about 10%, while the contribution of computers rises so much that it explains the entire increase in the relative wage. So as with our results when examining the change in the nonproduction labor share, when we now consider the factors influencing the relative wage, we find that both outsourcing and computer expenditure are important, with their exact magnitudes depending on how these variables are measured. >Nontraded Goods._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
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