Kevin Lewis

September 02, 2019

Psychological reactions to human versus robotic job replacement
Armin Granulo, Christoph Fuchs & Stefano Puntoni
Nature Human Behaviour, forthcoming

Advances in robotics and artificial intelligence are increasingly enabling organizations to replace humans with intelligent machines and algorithms. Forecasts predict that, in the coming years, these new technologies will affect millions of workers in a wide range of occupations, replacing human workers in numerous tasks, but potentially also in whole occupations. Despite the intense debate about these developments in economics, sociology and other social sciences, research has not examined how people react to the technological replacement of human labour. We begin to address this gap by examining the psychology of technological replacement. Our investigation reveals that people tend to prefer workers to be replaced by other human workers (versus robots); however, paradoxically, this preference reverses when people consider the prospect of their own job loss. We further demonstrate that this preference reversal occurs because being replaced by machines, robots or software (versus other humans) is associated with reduced self-threat. In contrast, being replaced by robots is associated with a greater perceived threat to one’s economic future. These findings suggest that technological replacement of human labour has unique psychological consequences that should be taken into account by policy measures (for example, appropriately tailoring support programmes for the unemployed).

Minimum Wage Employment Effects and Labor Market Concentration
José Azar et al.
NBER Working Paper, July 2019

Why is the employment effect of the minimum wage frequently found to be close to zero? Theory tells us that when wages are below marginal productivity, as with monopsony, employers are able to increase wages without laying off workers, but systematic evidence directly supporting this explanation is lacking. In this paper, we provide empirical support for the monopsony explanation by studying a key low-wage retail sector and using data on labor market concentration that covers the entirety of the United States with fine spatial variation at the occupation-level. We find that more concentrated labor markets – where wages are more likely to be below marginal productivity – experience significantly more positive employment effects from the minimum wage. While increases in the minimum wage are found to significantly decrease employment of workers in low concentration markets, minimum wage-induced employment changes become less negative as labor concentration increases, and are even estimated to be positive in the most highly concentrated markets. Our findings provide direct empirical evidence supporting the monopsony model as an explanation for the near-zero minimum wage employment effect documented in prior work. They suggest the aggregate minimum wage employment effects estimated thus far in the literature may mask heterogeneity across different levels of labor market concentration.

The Recent Evolution of Wisconsin Public Worker Unionism since Act 10
David Nack et al.
Labor Studies Journal, forthcoming

This paper examines the experience of four major public sector unions in Wisconsin since the passage of Wisconsin Act 10 in 2011. The four unions are the American Federation of State, County and Municipal Employees (AFSCME), the American Federation of Teachers (AFT-Wisconsin), the Service Employees International Union (SEIU), and the Wisconsin Education Association Council (WEAC), an affiliate of the National Education Association. Wisconsin’s prior legal framework for public sector collective bargaining is explained and compared to the new highly restrictive framework established by Act 10. That new framework, established by state legislation, is analyzed, as are its impacts on the membership, revenues, structures, and practices of the four unions. In general, we find the impacts to have been very dramatic, with a loss of active union membership averaging approximately 70 percent overall, and concomitant dramatic losses in union revenues and power. These shocks have engendered the restructuring of two of the unions examined, the downsizing of the third, and the de facto exiting from the state’s public sector in another. There have also been significant changes in representation practices in one union, but less so in the others. We conclude by discussing best union practices based on this experience, as well as considering what the recent public sector union history in Wisconsin may portend for public worker union membership nationwide, since the issuing of the Janus Decision by the U.S. Supreme Court.

Gig-Labor: Trading Safety Nets for Steering Wheels
Vyacheslav Fos et al.
Boston College Working Paper, July 2019

This paper shows that the introduction of the "gig-economy" changes the way employees respond to job loss. Using a comprehensive set of Uber product launch dates and employee-level data on job separations, we show that laid-off employees with access to Uber are less likely to apply for UI benefits, rely less on household debt, and experience fewer delinquencies. Our empirical strategy is based on a triple difference-in-difference empirical model, comparing the difference in outcome variables 1) pre- and post-layoff, 2) before and after Uber enters a market, and 3) between workers with and without the ability to participate on the ride-sharing platform (car-owners inferred from auto credit histories). In support of our identification strategy, we find no apparent pre-existing difference in outcomes in the months leading up to Uber's entry into a market. Moreover, the effects are severely attenuated for workers with an auto lease, for whom the viability of participating on the ride-sharing platform is significantly reduced. Overall, our findings show that the introduction of Uber had a profound effect on labor markets.

Military veterans are morally typecast as agentic but unfeeling: Implications for veteran employment
Steven Shepherd, Aaron Kay & Kurt Gray
Organizational Behavior and Human Decision Processes, July 2019, Pages 75-88

What kind of “mind” do people assume those in the military have? This question has important implications for military veterans and provides an opportunity to test moral typecasting as a critical element of the theory of dyadic morality (TDM: Gray & Wegner, 2009; 2011; Schein & Gray, 2017). Based on this theory, moral agents – even those we admire, such as veterans – will be seen as more agentic (ability to plan and act) but have less capacity for experience (ability to feel emotion). Leveraging previous theorizing on mind perception, dehumanization, and career typology, the current research shows that veterans are seen as having a higher capacity for agency but less capacity for experience. As a result, veterans are seen as less (more) suited for careers that require a high (low) capacity for experience. Results are found across laypeople, managers, and employees. Implications for veteran well-being are discussed.

The Geography of Unconventional Innovation
Enrico Berkes & Ruben Gaetani
Ohio State University Working Paper, July 2019

Using a newly assembled dataset of U.S. patents, we show that overall innovation activity is less concentrated in high-density urban areas than commonly believed, but inventions based on atypical combinations of knowledge are indeed more prevalent in high-density cities. To interpret this relation, we propose that informal interactions in densely populated areas help knowledge flows between distant fields, but are less relevant for flows between close fields. We build a model of innovation in a spatial economy that endogenously generates the pattern observed in the data: specialized clusters emerge in low-density areas, whereas high-density cities diversify and produce unconventional ideas.

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