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Technology Anxiety Past and Present

David H. Autor, MIT and NBER

Man and Machine: The Impact of Technology on

Employment

February 28, 2013

Agenda

1. Technology anxiety – Past and present

2. What is distinctive about the computer revolution?

3. Changes in occupations: A detailed look

4. The difficulty of forecasting

5. Luddites revisited – What neoclassical theory says

6. Final thoughts

An Era of Technology Anxiety

Are We Entering the “PC Era” of Workplace Robotics?

Rodney Brooks, CEO Rethink Robotics,

with “Baxter”

Are We Entering the “PC Era of Workplace Robotics”?

Declining U.S. Labor Force Participation Since 2000

Males

Females

Declining Labor Share of National Income Since 2000

Jacobson and Occhino, 2012

Traditional Economic View

1. Technological change is a win-win

• The only free lunch that economists can believe in (Mokyr, 1990)

2. Labor demand is unlimited

• “One of the best-known fallacies in economics is the notion that

there is a fixed amount of work to be done—a lump of labor—

which can be shared out in different ways to create fewer or

more jobs.”

3. Those who fear technological change are “Luddites.”

The Lump of Labor Fallacy

An Earlier Era of Technology Anxiety

Ned Ludd “Machine Trashing”

1812

66

100 Years of U.S. Consumer Spending

The sources of incomes changed,

too. In 1901, the average U.S. family

received 90.5 percent of its income from

the earnings of family members, with

9.5 percent of these earnings contrib-

uted by children. By the 21st century,

only 80.7 percent of family income came

from the direct earnings of family mem-

bers. Interestingly, in 2002-03 in New

York City and Boston, family earnings

constituted a greater proportion of

household income than they did in the

country as a whole. In New York City,

family members’ earnings contributed

85.0 percent to total household income;

in Boston, family earnings contributed

89.0 percent.

During the 100-year period, house-

hold expenditure patterns also demon-

strated great variability. In 1901, the

average U.S. household had $769 in

expenditures. By 2002–03, these expen-

ditures had increased 53-fold, to

$40,748. Over the same period, expen-

ditures in New York City had increased

62-fold, from $814 to $50,319, while in

Boston, the increase was 48-fold, from

$880 to $41,814. (See chart 39.)

In real dollars, calculated with 1901

as the base, expenditures also demon-

strated a notable increase. In 1901, as

noted, the average U.S. family had $769

in expenditures. By 2002–03, that

family’s expenditures would have risen

to $1,848, a 2.4-fold increase. In New

York City the increase would have been

2.8-fold, from $814 to $2,283; in Boston

the increase would have been 2.2-fold,

from $880 to $1,897. (See chart 40.)

The material well-being of families

in the United States improved dramati-

cally, as demonstrated by the change

over time in the percentage of expendi-

tures allocated for food, clothing, and

housing. In 1901, the average U.S. fam-

ily devoted 79.8 percent of its spend-

ing to these necessities, while families

in New York City spent 80.3 percent,

and families in Boston allocated 86.0

percent. By 2002–03, allocations on ne-

cessities had been reduced substan-

tially, for U.S. families to 50.1 percent

of spending, for New York City families

to 56.7 percent, and for Boston families

to 53.8 percent. (See chart 41.)

The continued and significant de-

cline over the century in the share of

expenditures allocated for food also

reflected improved living standards. In

1901, U.S. households allotted 42.5 per-

cent of their expenditures for food; by

2002–03, food’s share of spending had

dropped to just 13.2 percent. For New

York City households, the expenditure

share had declined from 43.7 percent

to 13.9 percent; for Boston households,

the decline was from 41.7 percent to

13.5 percent. (See chart 42.)

Beginning in the 1970s, another

trend emerged in spending for food. At

the time, the average U.S. family allo-

cated 72.4 percent of food expenditures

for food eaten at home and 26.4 per-

cent for food eaten away from home.

In New York City, a similar pattern held:

households allocated 72.2 percent of

their food spending for food eaten at

home and 26.7 percent for food eaten

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

1901 1918-19 1934-36 1950 1960-61 1972-73 1984-85 1996-97 2002-03

United States

Boston

New York City

Chart 38. Income deflated to 1901 for the United States,

New York City, and Boston

SOURCE: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey

Over the Course of a Century…

Over the Course of a Century…

68

100 Years of U.S. Consumer Spending

away from home. Boston family food

expenditure patterns were different,

with 66.1 percent of food spending al-

located for food at home and 33.5 per-

cent allocated for food eaten away from

home.

By the 21st century, however, the

average U.S. family allocated just 58.1

percent of food spending for food eaten

at home and 41.9 percent for food eaten

away from home. Similar patterns ex-

isted in New York City and in Boston:

the allocations in New York City were

54.4 percent and 45.6 percent, respec-

tively; in Boston, they were 58.7 per-

cent and 41.3 percent.

Changes in diets also occurred over

the 100-year period. In 1901, New York

City families allocated 40.4 percent of

their grocery expenditures for meat,

poultry, fish, and eggs; 16.3 percent for

dairy products; 14.5 percent for fruits

and vegetables; and 11.0 percent for

cereals and bakery products. Among

Boston families, the allocations for

these four categories of items were 48.4

percent, 17.5 percent, 8.3 percent, and

9.2 percent, respectively.

By 2002–03, grocery expenditure

shares for meat, poultry, fish, and eggs

had decreased to 28.3 percent in New

York City and to 27.2 percent in Bos-

ton. Shares for dairy products had de-

creased to 10.4 percent in New York City

and 10.8 percent in Boston; shares for

fruits and vegetables had increased to

19.2 percent in New York City and 17.0

percent in Boston; and shares for cere-

als and bakery products had increased

to 15.0 percent in both cities.

Home ownership shifted markedly.

In 1901, 19 percent of Americans owned

their home, while in 2002–03, 67 per-

cent of U.S. families did. In 2002–03,

56 percent of New York City households

owned their home, while in Boston, the

share was greater: 59 percent.

With greater home ownership and

higher housing costs, in the 1960s fam-

ily spending for housing became the

most significant item in household bud-

gets, displacing spending on food.

Spending for shelter constituted the

single largest segment of the average

family’s housing expenditures: 62.5 per-

cent in the country as a whole, 62.7 per-

cent in New York City, and 66.8 percent

in Boston.

Forty years later, in 2002–03, shelter

costs represented 19.3 percent of total

household expenditures in the coun-

try as a whole, 24.6 percent in New York

City, and 24.3 percent in Boston. In

other words, 1 out of every 4 dollars

spent by New York City and Boston

families went for shelter.

With the rise in expenditures for

shelter came an increase in spending

for utilities. In the 1970s, the average

U.S. family allotted 4.9 percent of total

spending for utilities; the average New

York City family, 3.8 percent; and the

average Boston household, 4.9 per-

cent. By 2002–03, shares of total

spending for utility costs were 6.7 per-

cent, 6.1 percent, and 6.4 percent.

Over the 100-year period, expendi-

ture shares for clothing steadily de-

50

55

60

65

70

75

80

85

90

1901 1918-19 1934-36 1950 1960-61 1972-73 1984-85 1996-97 2002-03

Percent

United States

Boston

New York City

Chart 41. Food, clothing, and housing expenditure shares

for the United States, New York City, and Boston

SOURCE: U.S. Bureau of Labor Statistics, Consumer Expenditure Survey

U.S. Employment Shares in Agriculture, Industry and Services, 1840 - 2010

Johnston 2012

68%

22%

10%

40%

27%

33%

11%

37%

52%

2%

20%

78%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Agriculture Industry Services

U.S. Employment Shares in Agriculture, Industry and Services, 1840 - 2010

1840 1900 1950 2010

Agenda






6. Final thoughts

Automation of ‘Routine Tasks:’ Jacquard Loom (1801)

Two Centuries of Productivity Growth in Computing: 2+ Trillion Fold Decline in Cost of Computing v. Labor

Nordhaus 2007

Information Technology Accounted for ~40% of

Business Investment as of 2010

0.00

0.04

0.08

0.12

0.16

0.20

0.24

0.28

0.32

0.36

0.40

1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Informa onProcessingEquipment+So wareShareofAllPrivateNon-Residen alInvestment,1959-2010(Source:BEANIPA)

Substitution, Complementarity: Tasks and Technology

Task

Description

Example Occupations

Potential Impact of Computerization

Routine Tasks • ‘Rules-based’

• Repetitive

• Procedural

• Bookkeepers

• Assembly line

workers

• Direct Substitution

Abstract Tasks • Abstract

problem-solving

• Mental flexibility

• Scientists

• Attorneys

• Managers

• Doctors

• Strong Complementarity

Manual Tasks • Environmental

Adaptability

• Interpersonal

Adaptability

• Truck drivers

• Security guards

• Flight attendants

• Home health aides

• Waiters

• Cleaners

• Limited Complementarity

or Substitution

U.S. Job Task Input by Education Group, 1980 Averages

HS

Dro

po

uts

HS

Dro

po

uts

HS

Dro

po

uts

HS

Gra

du

ate

s

HS

Gra

du

ate

s

HS

Gra

du

ate

s

So

me C

olle

ge

So

me C

olle

ge

So

me

Co

lleg

e

Co

lleg

e G

rad

s

Co

lleg

e G

rad

s

Co

lleg

e G

rad

s

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Manual Tasks Abstract Tasks Routine Tasks

U.S. Task Input by Education Group, 1980 Averages

Autor, Levy and Murnane, 2003

Agenda






6. Final thoughts

Autor, Levy and Murnane ‘03 Figure 1:

Economy Wide Changes in Job Task Content 1960 - 1998

Figure I.

Trends in Routine and Nonroutine Task Input, 1960 to 1998.

38

40

42

44

46

48

50

52

54

56

58

60

62

1960 1970 1980 1990 2000

Me

an

Ta

sk I

np

ut

in P

erc

en

tile

s o

f 1

96

0 T

ask D

istr

ibu

tio

n

Nonroutine analytic Nonroutine interactive Nonroutine manual

Routine cognitive Routine manual

ALM Update: Routine Task Measures to 2009

30

40

50

60

70

Mea

n T

ask I

npu

t in

Per

centi

les

of

196

0 T

ask D

istr

ibu

tion

1960 1970 1980 1990 2000 2010

Routine Cognitive (Updated) Routine Cognitive (ALM)

Routine Manual (Updated) Routine Manual (ALM)

Routine Tasks: ALM Originals and Updates

ALM Update:

Non-Routine Cognitive Task Measures to 2009

30

40

50

60

70

Mea

n T

ask I

npu

t in

Per

centi

les

of

196

0 T

ask D

istr

ibu

tion

1960 1970 1980 1990 2000 2010

Non−routine Analytical (Updated) Non−routine Analytical (ALM)

Non−routine Interpersonal (Updated) Non−routine Interpersonal (ALM)

Non−routine Cognitive Tasks: ALM Originals and Updates

ALM Update:

Non-Routine Manual Task Measure to 2009

30

40

50

60

70

Mea

n T

ask

Inp

ut

in P

erce

nti

les

of

196

0 T

ask

Dis

trib

uti

on

1960 1970 1980 1990 2000 2010

Non−routine Manual (Updated) Non−routine Manual (ALM)

Non−routine Manual Tasks: ALM Originals and Updates

Autor, Levy and Murnane ‘03 Figure 1 Update:

Economy Wide Changes in Job Task Content 1960 - 1998

30

40

50

60

70

Mea

n T

ask

In

put

in P

erce

nti

les

of

19

60

Dis

trib

uti

on

1960 1970 1980 1990 2000 2010

Non−routine Analytical Non−routine Interpersonal

Non−routine Manual Routine Cognitive

Routine Manual

All Education Groups

Worker Tasks in the U.S. Economy, 1960 − 2009:

The Impact of Another Decade’s Data

Original: 1960 – 1998 Update: 1960 – 2009

30

40

50

60

70

Mea

n T

ask

In

put

in P

erce

nti

les

of

19

60

Dis

trib

uti

on

1960 1970 1980 1990 2000 2010



Routine Manual

Autor, Levy, and Murnane (2003) Figure 1


30

40

50

60

70

Mea

n T

ask

In

put

in P

erce

nti

les

of

19

60

Dis

trib

uti

on

1960 1970 1980 1990 2000 2010



Routine Manual



Routine Cognitive Tasks: Levels and Changes

4045

5055

6065

7075

Mea

n Ta

sk In

put i

n P

erce

ntile

s of

196

0 Ta

sk D

istr

ibut

ion

1960 1970 1980 1990 2000 2010

All Males Females


Routine Cognitive Tasks 1960 - 2009: Overall and by Sex

Routine Manual Tasks: Levels and Changes

3035

4045

5055

6065

7075

8085

90M

ean

Task

Inpu

t in

Per

cent

iles

of 1

960

Task

Dis

trib

utio

n

1960 1970 1980 1990 2000 2010

All Males Females


Routine Manual Tasks 1960 - 2009: Overall and by Sex

Nonroutine Analytical Tasks: Levels and Changes

3035

4045

5055

6065

70M

ean

Task

Inpu

t in

Per

cent

iles

of 1

960

Task

Dis

trib

utio

n

1960 1970 1980 1990 2000 2010

All Males Females


Nonroutine Analytical Tasks 1960 - 2009: Overall and by Sex

Nonroutine Interpersonal Tasks: Levels and

Changes

2025

3035

4045

5055

6065

7075

80M

ean

Task

Inpu

t in

Per

cent

iles

of 1

960

Task

Dis

trib

utio

n

1960 1970 1980 1990 2000 2010

All Males Females


Nonroutine Interpersonal Tasks 1960 - 2009: Overall and by Sex

Nonroutine Manual Tasks: Levels and Changes

2025

3035

4045

5055

6065

70M

ean

Task

Inpu

t in

Per

cent

iles

of 1

960

Task

Dis

trib

utio

n

1960 1970 1980 1990 2000 2010

All Males Females


Non-Routine Manual Tasks 1960 - 2009: Overall and by Sex

Employment Polarization, 1979 – 2010 Percent Growth in Employment by Occupation

-.2

0.2

.4.6

Perso

nal C

are

Food/C

leaning Service

Prote

ctive

Service

Operato

rs/Laborers

Produ

ction

Offic

e/Adm

in

Sales

Technicians

Professio

nals

Mana

gers

Percent Change in Employment by Occupation, 1979-2010

1979-1989 1989-1999

1999-2007 2007-2010

Employment Polarization, 1979 – 2009 Percent Growth in Employment by Occupation

-10

-50

510

15

Servic

es

Prodn

/ Cra

ft/ O

per/

Labo

rer

Clerica

l/ Adm

in/ S

ales

Prof/

Tech/

Man

ager

s

Males

Ages 25-39 Ages 40-64

-10

-50

510

15Ser

vices

Prodn

/ Cra

ft/ O

per/

Labo

rer

Clerica

l/ Adm

in/ S

ales

Prof/

Tech/

Man

ager

s

Females

Ages 25-39 Ages 40-64

by Age Group and Major Occupation

Percent Change in Employment Share 1980-2009

Changes in Employment Share by Job Skill Tercile, 1993-2006 Comparison of U.S. and European Union Countries

-20

-10

010

20

USA

EU Ave

rage

Portug

al

Irelan

d

Finlan

d

Norway

Nether

lands

Greec

eUK

Sweden

Germ

any

Spain

Belgium

Denm

ark

Luxe

mbo

urg

Franc

e

Austri

aIta

ly

Source: Goos, Salomons and Manning (2009)

Lower Third Middle Third

Upper Third

US v. EU

Averages

EU Nations Ordered by Growth in High Skill

Occupation Share

Agenda






6. Final thoughts

Projection Occupational Employment Trends:

Gasoline Service Station Attendants

• 1976 projections

• “Employment of gasoline service station attendants should continue

to grow over the next few years….

• …The trend towards cars better gas mileage capabilities could

eventually reduced total gasoline consumption, which might severely

limited growth in this occupation over the long run.

• …Self-service gas stations may also limit growth.”

• 2002/03 projections

• Service station attendants (0*NET 53-6031.00).

• Service automobiles, buses, trucks, boats, and other automotive or

marine vehicles with fuel, lubricants, and accessories.

• Projected 2000-10 employment change: A decline

46.2K

40.5K

31.4K

35.2K

33.2K

31.1K

25.8K

22.8K 21.8K

22.8K

0K

5K

10K

15K

20K

25K

30K

35K

40K

45K

50K

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Gas Station Attendants in the U.S. 2000 - 2011

Projection Occupational Employment Trends:

Bank Tellers

1968

• “Important clerical occupations such as secretaries, stenographers, typists, cashiers, bank tellers, mail carriers, postal clerks, and telephone operators are not expected to be heavily affected by the use of computers…”

1980

• “Technological innovations will not affect many types of clerical workers whose jobs involve a high degree of personal contact.”

1992

• “… Employment of bank tellers is not expected to keep pace with overall employment growth in banks and other savings and credit institutions because of the increasing use of automatic teller machines…”

2000

• “… The increased use of ATM machines and Internet banking will reduce the number of tellers.”

493K

533K 527K 539K

553K

599K 603K 608K 600K

577K

556K 544K

0K

100K

200K

300K

400K

500K

600K

700K

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Bank Tellers in the U.S. 2000 - 2011

Agenda






6. Final thoughts

Traditional Economic View

1. Technological change is a win-win

• The only free lunch that economists can believe in (Mokyr, 1990)

2. Labor demand is unlimited

• “One of the best-known fallacies in economics is the notion that

there is a fixed amount of work to be done—a lump of labor—

which can be shared out in different ways to create fewer or

more jobs.”

3. Those who fear technological change are “Luddites.”

The Lump of Labor Fallacy

But Luddites Had Something to Fear…

Ned Ludd “Machine Trashing”

1912 – 1913

Technology Anxiety: Should we Worry?

• What the neoclassical theory predicts

a. There is a market-clearing wage, but it need only be

weakly positive

b. Labor’s share can rise or fall

c. Rising productivity passes the Kaldor-Hicks test, but not

necessarily the Pareto test

Percentage Point Changes in Real Hourly Wages by Education and Sex, 1979-2010

-25

-20

-15

-10

-50

510

15

20

25

30

35

< High

Sch

ool

High S

choo

l Gra

d

Some

Colleg

e

Colleg

e Gra

d

Post-C

olleg

e

Ages 25-39

Males Females

-25

-20

-15

-10

-50

510

15

20

25

30

35

< High

Sch

ool

High S

choo

l Gra

d

Some

Colleg

e

Colleg

e G

rad

Post-C

olleg

e

Ages 40-64

Males Females

by Education and Sex

Percent Changes in Real Hourly Wage Levels 1979-2010

Autor and Wasserman, 2013

Percentage Point Changes in Emp/Pop Rates by Education and Sex, 1979-2010

-0.1

0-0

.05

0.0

00

.05

0.1

00

.15

HS Dro

pout

HS Gra

duate

Some C

ollege

College G

raduate

Postcolle

ge

Pe

rce

nta

ge

po

int c

ha

ng

e in

em

plo

yme

nt t

o p

op

ula

tion

ra

te

1979-2007

Males Females

-0.1

0-0

.05

0.0

00

.05

0.1

00

.15

HS Dro

pout

HS Gra

duate

Some C

ollege

College G

raduate

Postcolle

ge

Pe

rce

nta

ge

po

int c

ha

ng

e in

em

plo

yme

nt t

o p

op

ula

tion

ra

te

2007-2010

Males Females

Changes in Employment to Population Rates by Sex and Education Group: Ages 25-64

Autor and Wasserman, 2013

Technology Anxiety: Is There a Cure?

1. Three views of the problem

a. We lack imagination

b. We have a labor demand problem

c. We have an income distribution problem

2. Worst case economic scenario

• Horses – The fax machines of the pre-automotive era

3. Education: “America’s best idea”

• Effective for raising incomes and economic mobility

Documents

Technology Anxiety Past and Presentcurriculumredesign.org/wp-content/uploads/Autor-ManAndMachine-Fe… · Technology Anxiety Past and Present David H. Autor, ... Technological change