How Computer Automation Affects Occupations: Technology, Jobs, and Skills

Innovation and Economic Growth

Article Snapshot


James Bessen


Boston University School of Law, Law and Economics Research Paper No. 15-49, October, 2016


Does computer automation lead to job losses? Data from the United States show that jobs that use computers intensively have experienced more growth in past decades; jobs that use few computers have had more losses.

Policy Relevance

Policymakers should ensure that workers have the skills they need to use computers.

Main Points

  • Automation has begun to affect white-collar jobs, and computers might soon take over jobs traditionally done by bookkeepers, bank tellers, and clerks.
  • Few studies have considered empirical evidence as to whether computer automation generates a net loss of jobs across the entire economy.
  • Most automation is partial, that is, the computer takes over some tasks associated with the job, but does not replace the human worker entirely; since 1950, only one job, that of elevator operators, has disappeared entirely.
  • Partial automation can increase employment; ATM machines reduce the cost to banks of opening branches, and banks opened far more branches, and more tellers were employed overall.
  • Computer-using occupations have grown faster by about .45% per year than those that do not use computers intensively; occupations that use few computers have suffered more job losses.
  • Even if automation means that the number of jobs overall will increase, many workers will be dislocated; low wage jobs will be lost, while high-wage jobs will tend to be gained, meaning that, overall, computer automation could contribute to income inequality.
  • The main policy problem will be ensuring that low wage workers will acquire the new skills they need to transition to new jobs.

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