Research: The Future of Employment: How Susceptible are Jobs to Computerization?

Excerpt from research by Carl Benedikt Frey and Michael A. Osborne, University of Oxford — September 2013

We examine how susceptible jobs are to computerization. To assess this, we begin by implementing a novel methodology to estimate the probability of computerization for 702 detailed occupations, using a Gaussian process classifier. Based on these estimates, we examine expected impacts of future computerization on US labour market outcomes, with the primary objective of analyzing the number of jobs at risk and the relationship between an occupation’s probability of computerization, wages and educational attainment. According to our estimates, about 47 percent of total US employment is at risk. We further provide evidence that wages and educational attainment exhibit a strong negative relationship with an occupation’s probability of computerization…

Our paper is motivated by John Maynard Keynes’s frequently cited prediction of widespread technological unemployment “due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour”. Indeed, over the past decades, computers have substituted for a number of jobs, including the functions of bookkeepers, cashiers and telephone operators. More recently, the poor performance of labour markets across advanced economies has intensified the debate about technological unemployment among economists. While there is ongoing disagreement about the driving forces behind the persistently high unemployment rates, a number of scholars have pointed at computer-controlled equipment as a possible explanation for recent jobless growth…

At the same time, with falling prices of computing, problem-solving skills are becoming relatively productive, explaining the substantial employment growth in occupations involving cognitive tasks where skilled labour has a comparative advantage, as well as the persistent increase in returns to education. The title “Lousy and Lovely Jobs”, of recent work by Goos and Manning, thus captures the essence of the current trend towards labour market polarization, with growing employment in high-income cognitive jobs and low-income manual occupations, accompanied by a hollowing-out of middle-income routine jobs…