In The Know

How do workers perceive automation risks? It’s complicated, AEI study finds

We are living in an increasingly automated and technologically integrated world.

The ways in which these advancements affect or even displace workers is a massive consideration for employers, employees, and policy makers alike. Being sure to maximize productivity through automation is important for continued economic growth. And yet not abandoning left behind workers replaced by automation, giving them the support they need to transition to new occupations, is imperative. 

Focusing in on one particular industry, trucking, which as a field is at the forefront of massive technological transformation as automated vehicles become increasingly sophisticated, American Enterprise Institute scholars Daniel Shoag, Michael R. Strain, and Stan Veuger study the crucial question of how workers perceive automation risks and what that means for retraining. The working paper is entitled How Do Workers Perceive the Risks from Automation and the Opportunities to Retrain? Evidence from a Survey of Truck Drivers.

Looking at new survey results from the RAND American Truck Driver Panel, they find, counterintuitively, that the drivers who are most concerned about coming automation are also those most likely to re-invest themselves in driving. The authors believe that this may be driven by incorrect information about outside options, as the effect disappears among those drivers who are most familiar with the generally low costs of community college. 

This suggests that effective information provision can have large positive externalities and welfare consequences, they outline. Better informing workers of the true costs of available options helps them make more socially efficient decisions. 

They also found that a tricky reality remains: a calibration of labor market prospects suggests that even with the provision of accurate information on the true costs of retraining, this may not be adequate to actually induce occupational switch if the workers believe the wages for survivors will continue to grow. Workers tend to believe that they will be one of the few to capture the diminishing yet increasingly valuable jobs that remain.

Ultimately, they write, “This paper suggests, instead, that policymakers may want to focus on the decisions of workers in at-risk occupations before risks fully materialize.”

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