The Labor Market Impacts of Technological Change: From Unbridled Enthusiasm to Qualified Optimism to Vast Uncertainty

This review considers the evolution of economic thinking on the relationship between digital technology and inequality across four decades, encompassing four related but intellectually distinct paradigms, which I refer to as the education race, the task polarization model, the automation-reinstatement race, and the era of Artificial Intelligence uncertainty. The nuance of economic understanding has improved across these epochs. Yet, traditional economic optimism about the beneficent effects of technology for productivity and welfare has eroded as understanding has advanced. Given this intellectual trajectory, it would be natural to forecast an even darker horizon ahead. I refrain from doing so because forecasting the “consequences” of technological change treats the future as a fate to be divined rather than an expedition to be undertaken. I conclude by discussing opportunities and challenges that we collectively face in shaping this future.