Home >Companies >News >The jobs threat from automation may be exaggerated: World Bank

The fear that robots will take away our jobs in the days to come is highly exaggerated, according to the draft of the World Development Report 2019 published by the World Bank last week. The report notes that concerns over technology-led disruption are not new. Since the nineteenth century, several thinkers have worried about this possibility but their dire predictions have not come true. And this time is no different, the World Bank argues.

The report shows that the returns to human capital are, in fact, higher during periods of rapid technological change. As per the report, individuals with strong human capital can reap higher benefits from technologies as they are able to better adapt to the changing work. The report cites the example of the Green Revolution in India, when it was the more educated farmers who were able to adopt new technologies faster. Technological advancement can help boost productivity as well as generate new job categories—an example is app developers, who now constitute an estimated 4 million workforce in India. Some jobs will indeed be lost due to automation but skilled workers don’t have much to fear, the report argues.

Also see: World Development Report 2019: The Changing Nature of Work (

The growing importance of automation in some countries may be because of a key supply side phenomenon: decline in workers. That’s the finding of a new National Bureau of Economic Research (NBER) working paper by Daron Acemoglu of MIT and Pascual Restrepo of Boston University. The authors’ analysis of data across 52 countries during 1993 to 2014 shows that differential ageing alone explains close to 40% of the cross-country variation in the adoption of industrial robots. The authors also provide evidence of rapid development of automation technologies in countries undergoing greater demographic change.

Also see: Demographics and Automation (

People who enter government service during recessions receive a more significant and long-term wage gain relative to those who join the government in boom periods, shows a recent NBER paper by Congshan Zhang and John M. de Figueiredo of Duke University. This could be because college graduates tend to enter administrative jobs which have lower initial wages but higher wage growth than other job categories. Another reason, the paper shows, could be that hires during recessions are better matched to government jobs than those hired in booms.

Also see: Are Recessions Good for Government Hires? The Effect of Unemployment on Public Sector Human Capital (

Divorce rates in India have shot up over the past couple of decades, according to a recent Economic & Political Weekly paper by Grace Bahalen Mundu of Fakir Mohan University and Sayeed Unisa of the International Institute for Population Sciences. The paper, which is based on data from the census and district level household survey, shows that the all-India marriage dissolution rate per 1,000 ever-married women of 15 years of age and above has increased from 6.6 in 1971 to 9.6 in 2011. The dissolution rates are higher in North-east, South and West India compared with other regions.

Also see: Patterns of Marriage Dissolution in India: Regional, Socio-economic, and Religious Trends (

The sanctity of the auction process under the Insolvency and Bankruptcy Code (IBC) needs to be maintained to enable a fair playing ground for everyone who is interested in resolving a firm, argues a recent blog post by economist Ajay Shah. Citing the example of UltraTech Cement Ltd petitioning the National Company Law Tribunal to not approve Dalmia Bharat Ltd’s bid for Binani Cement Ltd after the bid was chosen, the blog argues that such cases would set a bad precedent. The lack of finality disrupts the trust of the bidders in the process, Shah argues. This could eventually lead bidders to put in lower bids due to the fear that the outcome may not be certain.

Also see: Concerns about the Indian bankruptcy reform (

Economics Digest runs weekly, and features interesting reads from the world of economics.

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