Technology and jobs: A systematic literature review

TL;DR

This systematic review finds that technological change over the past four decades generally does not lead to net unemployment, as job creation mechanisms offset labor displacement, though low-skill workers remain vulnerable.

Contribution

It provides a comprehensive synthesis of empirical studies on technology's impact on employment across five technology categories over four decades.

Findings

Labor-displacing effects are offset by job creation mechanisms.

Technological change adversely affects low-skill and manufacturing workers.

Overall, technology does not cause widespread unemployment so far.

Abstract

Does technological change destroy or create jobs? New technologies may replace human workers, but can simultaneously create jobs if workers are needed to use these technologies or if new economic activities emerge. Furthermore, technology-driven productivity growth may increase disposable income, stimulating a demand-induced expansion of employment. To synthesize the existing knowledge on this question, we systematically review the empirical literature on the past four decades of technological change and its impact on employment, distinguishing between five broad technology categories (ICT, Robots, Innovation, TFP-style, Other). Overall, we find across studies that the labor-displacing effect of technology appears to be more than offset by compensating mechanisms that create or reinstate labor. This holds for most types of technology, suggesting that previous anxieties over widespread technology-driven unemployment lack an empirical base, at least so far. Nevertheless, low-skill, production, and manufacturing workers have been adversely affected by technological change, and effective up- and reskilling strategies should remain at the forefront of policy making along with targeted social support systems.