Adoption of deskilling technology and increase in labor supply vary by individual skill
COM3 Level 1
SR14, COM3 01-23
Abstract:
How does adoption of deskilling technology vary with worker skill and how does adoption affect their supply of labor? We develop a simple analytical model of deskilling technology (which substitutes for skill). Deskilling technology increases labor supply in two ways—by increasing productivity and reducing the disutility of effort (amenity). Deskilling technology increases productivity and reduces disutility relatively more among low-skill workers. Hence they are more likely to adopt the technology and increase their labor supply. We test these propositions with a discrete choice experiment on navigation technology among ride-hail drivers. Subjects at the median skill level valued map apps at 7.2 percent of gross earnings, and 7.9 percent would stop ride-hail work without them. The valuation and effect on labor supply were higher among subjects with worse driving knowledge. Importantly, the valuation of the technology increased with the amenity.
Bio:
Png is a Distinguished Professor in the School of Business and Departments of Economics and Information Systems and Analytics (by courtesy) at the National University of Singapore. Presently (2023-24), he is NUS Fellow at the Center for Advanced Study in the Behavioral Sciences, Stanford. Previously, he was a faculty member at the Anderson School, University of California, Los Angeles (1985-96) and the Hong Kong University of Science & Technology (1993-96). Png graduated with first class honours in economics from the University of Cambridge (1978) and a PhD from the Stanford Graduate School of Business (1985). His research focuses on the economics of productivity and innovation. Recent work is forthcoming or published in the Review of Economics and Statistics, Strategic Management Journal, Management Science, and the Proceedings of the National Academy of Sciences. He was/is the Principal Investigator of major grants funded by the Social Sciences Research Council, Singapore (SPIRE (Service Productivity and Innovation Research), $4.75 million, 2017-22; BeWork (Behavioural Biases at Work), $1.63 million, 2023-27). Png is the author of Managerial Economics, which has been published in multiple editions and adapted into Chinese (traditional and simplified characters), Korean, and Polish.