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American Economic Review Vol. 104 No. 5 2014

Return of the Solow Paradox? IT, Productivity, and Employment in US Manufacturing

Daron Acemoglu1; David Autor2; David Dorn3; Gordon Hanson4; Brendan M. Price5

1 MIT, 40 Ames Street, Cambridge, MA 02142, CIFAR, and NBER (e-mail: ) · 2 MIT, 40 Ames Street, Cambridge, MA 02142, and NBER (e-mail: ) · 3 CEMFI, Casado del Alisal 5, 28014 Madrid, Spain, and IZA (e-mail: ) · 4 School of International Relations and Pacific Studies, 0519, University of California, San Diego, 9500 Gilman Drive, La Jolla, CA 92093-0519, and NBER (e-mail: ) · 5 MIT, 40 Ames Street, Cambridge, MA 02142 (e-mail: )

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Abstract

An increasingly influential 'technological-discontinuity' paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using US manufacturing industries. There is some limited support for more rapid productivity growth in IT-intensive industries depending on the exact measures, though not since the late 1990s. Most challenging to this paradigm, and to our expectations, is that output contracts in IT-intensive industries relative to the rest of manufacturing. Productivity increases, when detectable, result from the even faster declines in employment.

DOI
10.1257/aer.104.5.394
Volume
104
Issue
5
Pages
394-399
Language
en
Sources
crossref bibtex:phds-export.bib openalex

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