The macroeconomics of automation: Data, theory, and policy analysis

Nir Jaimovich*, Itay Saporta-Eksten, Henry Siu, Yaniv Yedid-Levi

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


The decline in middle-wage occupations and rise in automation over the last decades are at the center of policy discussions. We develop an empirically relevant general equilibrium model that features endogenous labor force participation, occupational choice, and automation capital. We use the model to consider two types of policies: the retraining of workers who were adversely affected by automation, and redistribution policies that transfer resources to these workers. Our framework emphasizes general equilibrium effects such as displacement effects of retraining programs, complementarities between the factors of production, and the effects of distortionary taxation that is required to fund these programs.

Original languageEnglish
Pages (from-to)1-16
Number of pages16
JournalJournal of Monetary Economics
StatePublished - Sep 2021


  • Automation
  • Labor force participation
  • Polarization
  • Routine employment
  • Universal basic income


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