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Strengthening Social Protection to Pave the Way for Technological Innovation: Evidence from the U.S.
Author:
Fernanda Brollo
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Series:
IMF Working Papers
Volume/Issue:
Volume 2024: Issue 095
Language:
English
Publication Date:
03 May 2024
DOI:
https://doi.org/10.5089/9798400274596.001
ISBN:
9798400274596
ISSN:
1018-5941
Pages:
21
Keywords:
Automation; Innovation; Gen-AI; Social Protection; Social Assistance; Social Safety Nets; Labor Market; Unemployment Insurance; labor market program; IMF working paper 24/95; protection policy; wage measure; job searching; employment polarization; Robotics; Labor markets; Employment; Wages; Unemployment benefits; Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper investigates the impact of automation on the U.S. labor market from 2000 to 2007, specifically examining whether more generous social protection programs can mitigate negative effects. Following Acemoglu and Restrepo (2020), the study finds that areas with higher robot adoption reduced employment and wages, in particular for workers without collegue degree. Notably, the paper exploits differences in social protection generosity across states and finds that areas with more generous unemployment insurance (UI) alleviated the negative effects on wages, especially for less-skilled workers. The results suggest that UI allowed displaced workers to find better matches The findings emphasize the importance of robust social protection policies in addressing the challenges posed by automation, contributing valuable insights for policymakers.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund