Figure 3

Hours shifting from people to machines.

Illustrative. The drawing is shown at its authored width when the window is wide enough.

Figure 3. Hours shifting from people to machines. (a) Competitive labor market. If automation’s displacement effect outweighs its productivity effect, demand for human hours shifts left from D₀ to D₁ (B) and the market moves from E₀ to E₁ (C): ΔL fewer paid hours at a lower wage. The hatched area (A) is the fall in the wage bill, w₀L₀ minus w₁L₁. If productivity gains dominate, demand shifts right instead. (b) Task framework after Acemoglu and Restrepo: tasks run from N − 1 to N, and r(i) is machine over human unit cost. Machines do tasks below the frontier I, provided they are cheaper there (r below 1, tasks below Ĩ). Automation moves the frontier from I₀ to I₁ (D). New tasks raise N and reinstate human work. Curves are schematic.