Exploring consequences of robotics for the labour market: a microeconomic approach

Abstract

The purpose of this study is to examine the consequences of new developments in robotization for the labour market. We do this by performing a microeconomic analysis, and using the Ricardian labour model of Acemoglu and Autor (2011) as a basis for this analysis. The possibilities and applications of technology are changing rapidly in this era. This has important consequences for the production process and therefore also for the task allocation and wages of the workers. In this research, the workers will be divided into three groups: low-skilled, medium-skilled and high-skilled workers. Further, we will distinguish two types of technology. Technology can lead to increased productivity for a specific type of workers, and technology can replace workers of certain type by performing the tasks these workers performed before. We find that technology influences the task allocation between the three worker types and the corresponding wages. Technology can also lead to unemployment of one or more worker groups, depending on the rigidity of wages. Policy recommendations for firms and government are given to improve the adaptation of organizations to technology developments.