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Automation Drives Income Inequality, Study Says

By MIT News

November 21, 2022

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A study by Daron Acemoglu of MIT and Pascual Restrepo of Boston University quantifies the extent to which automation has contributed to income inequality in the United States, simply by replacing workers with technology. The study finds that automation accounts for more than half of the increasing income gap between more- and less-educated workers in the U.S. over the last four decades.

Acemoglu and Restrepo estimate that automation has reduced the wages of men without a high school degree by 8.8 percent and women without a high school degree by 2.3 percent, adjusted for inflation. 

Acemoglu refers to the tradeoffs of technologies like self-checkout kiosks. Such innovations are good for the corporate bottom line, bad for service-industry employees, and not hugely important in terms of overall productivity gains, the real marker of an innovation that may improve overall quality of life.

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