How Computer Automation Affects Occupations: Technology, Jobs, and Skills

James Bessen
Boston University School of Law

Boston University School of Law Law & Economics Working Paper No.15-49 Revised May 16, 2016

October 3, 2016

Abstract

This paper investigates basic relationships between technology and occupations. Building a general occupational model, I look at detailed occupations since 1980 to explore whether computers are related to job losses or other sources of wage inequality. Occupations that use computers grow faster, not slower. This is true even for highly routine and mid-wage occupations. Estimates reject computers as a source of significant net technological unemployment or job polarization. But computerized occupations substitute for other occupations, shifting employment and requiring new skills. Because new skills are costly to learn, computer use is associated with substantially greater within-occupation wage inequality.

James Bessen
Boston University School of Law
765 Commonwealth Avenue
Boston, MA 02215

Email: jbessen@bu.edu