If robots are coming for our jobs, someone forgot to tell the labour market data

It seems that every other week there is a new article written about how robots are coming to take all our jobs - the coronavirus pandemic is just the latest reason to be worried about this (for example, see here). However, this 2017 article by Jeff Borland and Michael Coelli (both University of Melbourne), published in the journal Australian Economic Review (sorry, I don't see an ungated version online), provides a reasonable and evidence-based contrast to the paranoia.

Borland and Coelli essentially argue that, if robots are taking our jobs, we should be able to observe this in the data. And we don't. This is analogous to Robert Solow's famous 1987 quip that "You can see the computer age everywhere but in the productivity statistics".

Borland and Coelli note that:

Evidence for the claimed effects of computer-based technologies on the labour market, however, is remarkably thin. Sometimes it consists simply of descriptions of the new technologies, perhaps with an assertion that these technologies are more transformative than what has come before. Sometimes it consists of forecasts of the proportion of jobs that will be destroyed by the new technologies. Sometimes measures are presented that, it is argued, establish that the new technologies are causing workers to lose their jobs or be forced to shift between jobs more frequently than in the past. Sometimes the evidence is an argument that categories of workers not previously displaced by technological change are now being affected.

They then present data from Australia that basically shows that the adoption of computer technology ('robots', broadly defined) is having little effect on the total number of jobs in the Australian labour market. That is:

From our analysis of employment outcomes in the Australian labour market we arrive at two main findings. First, there is no evidence that adoption of computer-based technologies has decreased the total amount of work available (adjusting for population size). Second, there is no evidence of an accelerating effect of technological change on the labour market following the introduction of computer-based technologies.

Interestingly, the common claim that the cohort entering the workforce now will work many more jobs over their working life that the cohorts before them comes in for a particularly rough time:

Not only is there no evidence that more workers are being forced to work in short duration jobs, but what is apparent is that the opposite has happened. The proportion of workers in very long duration jobs has increased from 19.3 per cent in 1982 to 26.7 per cent in 2016, and there has been a corresponding decrease in the proportion of workers in their jobs for less than a year.

Of course, none of this means that computer-based technology is having no effect on jobs. Like most pervasive technological changes, the rise of computer-based technology changes the type of jobs that are available, and the distribution of those jobs between groups of workers and between regions (or between urban and rural areas). However, based on the data we have so far, it is not correct to be making the apocalyptic claims that some pundits are making.

So, why is everyone so afraid of the robots? Maybe those making the claims are not really afraid. Maybe it's just incentives at work, leading them to make those claims. Borland and Coelli note that:

You are likely to sell a lot more books writing about the future of work if your title is ‘The end of work’ rather than ‘Everything is the same’. If you are a not-for-profit organisation wanting to attract funds to support programs for the unemployed, it helps to be able to argue that the problems you are facing are on a different scale to what has been experienced before. Or if you are a consulting firm, suggesting that there are new problems that businesses need to address, might be seen as a way to attract extra clients. For politicians as well, it makes good sense to inflate the difficulty of the task faced in policy making; or to be able to say that there are new problems that only you have identified and can solve.

That makes a lot of sense, and on the surface so do the claims of the robot apocalypse. At least, until you start to look at the data, which make those claims shaky at best.

Read more:

• Taxing robots may be a good idea, but it won't keep people employed