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Automation, job reallocation, occupational choice, and related government policy

Published online by Cambridge University Press:  27 March 2024

Chia-Hui Lu Open the ORCID record for Chia-Hui Lu [Opens in a new window]
Chia-Hui Lu*
Affiliation:
Department of Economics, National Taipei University, New Taipei, Taiwan
*
Emails: chiahuilu.chlu@gmail.com, chlu@mail.ntpu.edu.tw
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Abstract

By introducing automation development into a labor search model, this paper obtains that the increasing importance of automation in production may be responsible for the reduction in job reallocation along the transitional dynamics path. In the long run, we find automation also increases the total unemployment rate and reduces overall labor force participation. In addition, decreasing any disparity between differently skilled labor is detrimental to job reallocation along the transitional dynamics path, and both the long-run total unemployment rate and overall labor market participation will fall. Nevertheless, appropriate government subsidy policies can improve business dynamics across the labor market.

Keywords

Automationsearch and matchingjob reallocationoccupational choice
Type
Articles
Information
Macroeconomic Dynamics , First View , pp. 1 - 30
Copyright
© The Author(s), 2024. Published by Cambridge University Press

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