The Future of Work
Speech given by
Mark Carney,
Governor of the Bank of England
2018 Whitaker Lecture, Central Bank of Ireland
14 September 2018
I am grateful to Clare Macallan and Jennifer Nemeth for their assistance in preparing these remarks.
I would also like to thank Will Abel, Andy Haldane, Carsten Jung, Rana Sajedi and Greg Thwaites for
the background research and analysis they conducted.
It is a pleasure to deliver this lecture in honour of TK Whitaker.
Whitaker's career in public policy spanned a period of profound structural change in the Irish economy. In
1956, when he became Secretary of the Department for Finance, the Irish economy was isolated and
uncompetitive. Growth in output per capita was lagging the rest of Europe and the steady tide of emigration
was gradually shrinking the population. By the time Whitaker's career drew to a close, the Celtic Tiger was
roaring: Ireland had caught up with even the most prosperous nations in the EU, GDP growth was averaging
over 5%, and the population had increased by two-thirds as emigration switched to immigration.
The catalyst for this transformation was opening up to foreign trade and investment. Beginning with the 1958
report Economic Development, Whitaker strongly advocated replacing the old strategy of self-sufficiency with
a new one of export-led growth, which led in time to Ireland joining the EU. For many, this is the greatest
long-term consequence of his work.
But as students of economic history know (and policymakers learn at their cost), without the right institutions,
- -
structural changes whether large changes to trading relationships or technological revolutions can be
painful.
Whitaker recognised that "Readiness to adapt to changing conditions is a sine qua non for economic
success"1 and that adaptability required a series of changes to Ireland's institutions. Major reforms to
education were essential to match the skills of the Irish workforce to the potential jobs that increased inward
investment could bring. A 1964 report on Manpower Policy, which Whitaker oversaw as chair, advocated
greater investment in the STEM subjects, readying a generation for the IT revolution.2 More broadly, Ireland
repeatedly increased standards of education, beginning with the introduction of universal secondary
schooling in 1967, resulting in levels of educational attainment today that exceed the OECD average.3
Whitaker also advocated reforms of labour market institutions - to tackle restrictive work practices and
ensure pay was more closely linked to productivity.4
Emphasis was also placed on a competitive environment for business to help attract foreign capital, in part
through the overhaul of the corporate tax regime. And improvements were made to infrastructure, such as
power supplies and transport services.
1
Taken from "Economic Development", a report on the Irish Economy overseen by Whitaker and published in 1958.
2
Whitaker played a central role in improving education in the public sector. His concern "that the variety and difficulty of
administrative
problems have so increased, and the tools and techniques for solving them have so developed, as to render administration more than
ever a science" resulted in the creation of the Institute of Public Administration in 1957. To this day, the Institute continues to provide
education, training and research to the public sector, enabling better policy making through a better understanding of the Irish economy.
-
In addition, Whitaker was instrumental in setting up the Economic and Social Research Institute the first institution to provide
independent research and analysis of the Irish economy.
3
For example, nine Regional Technical Colleges were established during the 1970s to provide vocational tertiary level training. The
Industrial Development Authority ensured that government funding of higher education adapted to meet businesses' increasing
demands for skilled labour in areas such as engineering and computer sciences, helping to ensure people could develop the skills
necessary to work in the expanding sectors.
4
Whitaker, TK (1955/1956) 'Capital formation, saving and economic progress', Dublin: Journal of the Statistical and Social Inquiry
Society of Ireland, Vol. XVIX, pp. 184-209.
The Irish experience over the past half century reinforces the lessons learnt in the UK from the three
profound technological revolutions - institutions are essential to smooth the major transitions and to ensure
their promise is realised by as many as possible.
Getting institutions right is critical not just for core economic outcomes but for broader well-being.
The fundamental challenge is that alongside the great benefits they ultimately bring, every technological
revolution mercilessly destroys jobs and livelihoods - and therefore identities - well before the new ones
emerge.
This was true of the eclipse of agriculture and cottage industry by the industrial revolution, the development
of the production line, the displacement of manufacturing by the service economy.5
We are on the cusp of a Fourth Industrial Revolution, which has the potential to transform fundamentally the
nature of both work and commerce through advances in AI, automation and interconnectedness.
Our economies are reorganising into a series of distributed peer-to-peer connections across powerful
-
networks revolutionising how people consume, work and communicate. The nature of commerce is
changing. Sales are increasingly taking place online and over platforms, rather than on the high street.
Intangible capital is now more important than physical capital.6 We are entering an age when anyone will be
able to produce anything anywhere through 3-D printing, where anyone can broadcast their performance
globally via YouTube or sell to China whatever the size of their business via Tmall.
Today, I want to discuss how we can apply the lessons from the history of the first three industrial revolutions
to the fourth to secure a future that benefits all.
Crisis? What Crisis?
Some economists wonder what all the fuss is about. They argue that there has been little evidence, over the
long term, of technological unemployment. After all, average employment and unemployment rates today
are similar to those in the 18th century.
5
-
The First Industrial Revolution (1760 1840) saw the mechanisation of (mainly the textile) industry with the introduction of steam
power, moving people from home-based to factory-based production in urban areas. The Second Industrial Revolution (1860 - 1914)
was driven by the introduction of electricity to manufacturing, extending mechanised, assembly-line mass production to broader
-
industries. The Third Industrial Revolution (1970 2000) was defined by the move from mechanical/analogue to digital, with
-
widespread adoption of electronics from both the home and work environment. The Fourth Industrial Revolution (2000 current) anticipates
the dawn of true Artificial Intelligence in light of advances in robotics, nanotechnology and quantum computing.
6
In the UK, intangible investment rose above tangible investment in the early 2000s, and stood at 11% as a share of output in 2014
compared with 10% for tangible investment. Investment in intangibles also exceeded that in tangibles in the US, Sweden and Finland
[on average over 1999-2003], but not in other European countries including German, Italy and Spain. See Haskel, J and Westlake, W
(2017), 'Capitalism Without Capital: The Rise of the Intangible Economy', Princeton University Press; and Goodridge, P R, Haskel, J
and Wallis, G (2016), 'Accounting for the UK Productivity Puzzle: A Decomposition and Predictions', Economica, Vol. 85, Issue
339.
But such big transitions take time. Workers generally cannot move seamlessly to new jobs in which they can
be productive. The benefits of the First Industrial Revolution, which began in the latter half of the 18th
century, were not felt fully in productivity and wages until the second half of the 19th.7
Indeed, at the start of the 19th century in the UK, despite a sharp pickup in productivity, wage growth stalled
- a period dubbed "Engels' pause".
and the labour share fell
A Framework for Examining Technical Change and the Labour Market
To understand such dynamics it helps to have a common conceptual framework.8 The impact of
technological change on employment and wages can be depicted as the sum of three major effects:
destruction, productivity and creation.
The destruction effect is the focus of most alarmist accounts: the replacement of labour by technology, with
an associated reduction in labour demand, wages and employment.
Less commonly acknowledged are the positive effects on aggregate demand of new technologies, what can
be termed the productivity effect.
Say's law
This effect is analogous to the classic in which supply creates its own demand. Technology makes
those in work more productive, in time boosting wages and increasing the returns to those who own capital.
This greater income boosts aggregate demand and leans against the destruction effect.
When technological change is disruptive and widespread, the productivity effect is generally insufficient to
counteract completely the destruction effect, partly because of the time it takes for the full potential of new
-
technologies to be realised, and partly because of the phenomenon of greater job polarisation to which I
will turn to in a moment.
As a consequence, over the medium term, technological change tends to reduce labour's share of income.
Historically, however, technological progress has not led to permanent declines in the labour share because
-
of a third effect the creation of new tasks for labour.9 When combined with the productivity effect, this
ultimately has counterbalanced the displacement effects of technology, boosting productivity and wages
while leaving employment unaffected.
7
Partly there is a lag in reorganising enough of the economy to the advantage of the new general purpose technology for aggregate
productivity growth to increase.
8
The following is based on Acemoglu, D and Restrepo, P (2018), 'Artificial Intelligence, Automation and Work', NBER Working Paper
No. 24196.
9
This creation effect need not be fully exogenous to the technological change, for example because the new technologies allow new
jobs to emerge that wouldn't otherwise be possible -
though of course factors like education and skills are important in determining how
quickly and smoothly these gains come about.
Could this time be different?
The Fourth Industrial Revolution could differ from its three predecessors in terms of scope, scale and speed.
Scope
Thus far, each wave of technological change has increased the importance of cognitive tasks relative to non-
cognitive ones. In other words, machines have largely substituted for human hands not heads. Workers
have been able to improve their skills and take on newly created sets of cognitive, higher value tasks - tasks
beyond the cognitive limits of machines.
Rapid improvements in computing power, the increased availability of big data and advances in artificial
intelligence and machine learning mean smarter machines are already replacing a broader range of human
activities than before, reaching well into the range of "heads". New technologies may increasingly provide
intelligence, sensory perception, and reasoning which previously only labour could provide. Technological
believe future automation will move beyond substituting for the human tasks
optimists10 'routine-manual'
technology performed in the late 20th century to almost the entire spectrum of work.11
It may be left to people to provide "hearts" - that is, tasks that require emotional intelligence, originality or
social skills such as persuasion or caring for others. And if new forms of bespoke mass creativity are made
possible by the new global economy, human "hands" may once again take over (a form of cottage industry
going full circle).12 One thing that could be different is the effects of demographics. An ageing population
will lead to greater demand for care and a straight decrease in labour supply.13
Scale
The greater scope of the Fourth Industrial Revolution could mean its scale is larger too. Unlike in previous
episodes, the jobs most at risk of automation are likely to lie across the entire spectrum of wages.14
At one extreme, Frey and Osborne (2017)15 estimate that around half of US employment is at 'high risk'16 of
automation, over an unspecified period of time.
10
For example, Brynjolfsson, E and McAfee, A (2014), 'The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant
Technologies'. The most extreme view of this is put forward by
Daniel Susskind, who highlights the possibility that in the future
machines can perform all tasks leading to technological unemployment (Susskind, D (2017), 'A model of technological unemployment',
University of Oxford, Department of Economics Series Working Papers, No. 819).
11
The question at the heart of this debate is whether we can overcome 'Polanyi's Paradox' - that "we can know more than we can tell"
(Polanyi 1966). Our inability to detail these tasks (such as social interactions) in a formulaic manner currently makes them difficult to
encode and automate.
12
McKinsey (2017) also suggest demand for creative and social skills will increase.
13
I am grateful to my colleague Silvana Tenreyro for suggesting this point.
14
Brynjolfsson, E, Mitchell, T and Rock,D (2018), 'What Can Machines Learn and What Does It Mean for Occupations and the
Economy', AEA Papers and
Proceedings, Vol. 108, pp. 43-47.
15
Frey, C B and Osborne, M (2017), 'The future of employment: How susceptible are jobs to computerisation?',
Technological
Forecasting and Social Change, Vol. 114, pp. 254-280.
16
Defined as roles with over 70% chance of automation.
However, this estimate does not take into account the heterogeneity of tasks within jobs, focusing instead on
just the key tasks within each occupation. Each job usually has some components which cannot be
automated, even if many of its central components can be.
Indeed, evidence increasingly suggests that while large parts of many jobs will be subject to automation,
relatively few jobs will be completely automated.17 Felten, Raj and Seamans (2017)18 show that recent
advances in technology can be used to predict future changes in the task structure of occupations, lending
further support to the argument that technological advancement will likely change the nature of many jobs
rather than eliminate them completely.
The more extreme estimates are often based purely on technical feasibility of automation with limited
consideration of economic feasibility. For example, it may be possible to automate the pouring of drinks in
bars, but doing so may not present a cost saving over hiring bar staff to do the job let alone the ancillary
benefit of being able to tell them your troubles.
Taking these additional considerations into account reduces the share of jobs at high risk of automation to
some 10% in the UK and 15% in Ireland.19 That appears comparable with the three previous episodes of
technological revolution, which saw the share of aggregate employment accounted for by the most exposed
industries fall by between 10 to 20% over long periods.
Some argue that the greater scope and scale of tasks (as opposed to jobs) at risk of replacement by
technology means that new job creation might no longer increase overall employment. That is, the
destruction effect may outweigh the combined impact of the productivity and creation effects.
At the same time, the range of tasks at risk could substantially increase the impact on inequality for several
reasons. Most fundamentally, the more new technology substitutes for labour rather than complements it,
the more the gains would accrue to capital rather than labour. An unequal distribution of capital means that
increasing automation will push up inequality by construction. In the transition, what economists
euphemistically call frictions can lead to depressed local or national labour markets, boosting inequality.20
And if education is unable to keep pace with the changing demand for skills, those who already have the
skills to use new technologies will earn even higher premiums.21 Job polarisation will increase the supply of
labour competing for lower skilled jobs.22 Greater global interconnectedness will reinforce these dynamics.
17
For example, McKinsey Global Institute (2017), 'A Future that Works: Automation, Employment and Productivity' suggest that 60% of
occupations could see over 30% of their tasks replaced by technology, based on O*NET analysis.
18
Felten, E W, Raj, M and Seamans, R (2018), 'A Method to Link Advances in Artificial Intelligence to Occupational Abilities,
AEA
Papers and Proceedings, Vol. 108, pp. 54-57.
19
Nedelkoska, L and Quintini, G (2018), 'Automation, skills use and training', OECD Social, Employment and Migration Working
Papers
No. 202. Similarly, McKinsey argue that across advanced economies 15% of the workforce in total will need to shift occupational
categories because of digitisation, automation, and AI.
20
This process has been well documented for the China Shock in the US (Autor, Dorn and Hanson 2015) and the collapse of local
housing markets (Mian and Sufi 2015).
21
If those who understand technology less well are less willing to trust it and work with it, this could further increase its polarising effects.
Speed
Could the Fourth Industrial Revolution happen faster? Certainly, the time taken for new technologies to be
adopted has shortened dramatically since the dawn of the First Industrial Revolution.
The Story Thus Far
Current empirical work suggests on balance that, thus far, increased automation has been positive for
employment in aggregate even though it has led to substantial compositional changes. Importantly, while
technology has reduced middle-skilled employment, its effects on aggregate employment appear to have
been more than offset by increased product demand and local demand spillovers. After all, the employment
share in the UK is near all-time highs.
There are, however, signs that recent technological advances have increased inequality. Globally, labour
has seen its share of income fall over the past twenty years and the IMF (2017) finds that technological
progress during the 3rd Industrial Revolution has been the biggest contributor to this decline. The UK and
-
Ireland23 are outliers: in both countries, the labour share has been flat, and income inequality stable if high
- since the late 1980s.24
Moreover, there is strong evidence that advanced economy labour markets have been polarising since the
-
1980s a structural shift that have generally been attributed to technological displacement of mid-skilled jobs
resulting from the early stages of automation and digitisation of tasks. Employment growth has been
strongest at the high and low skilled ends of the jobs spectrum, resulting in a hollowing out of mid-skilled
employment. The polarisation of the labour market has also been evident in the returns to skilled labour,
with earnings growth for those with higher levels of education far outstripping those with less schooling.
So in summary thus far, if the Fourth Industrial Revolution is similar to past technological revolutions, the
-
overall effect will eventually be labour augmenting boosting productivity and wages, while creating new
jobs to maintain or even increase overall employment.
But that is in the long run. In the interim, if it is similar to previous industrial revolutions, it seems likely there
will be a period of technological unemployment, dislocation and rising inequality.
Given that it could happen more rapidly, the challenge of workforce adjustment could be more difficult. The
shifts required in employment from jobs involving heads to those with hearts and hands could be far greater
each year than seen in previous episodes. Moreover, unlike in the previous industrial revolutions, the more
rapid pace of adjustment and longer working lives means workers may not have the option of retiring. This
22
Analysis by the IMF indicates that the extent of job polarisation depends far more on the ease of substitution between labour and
technology than it does on the relative price of technology.
23
Calculating the labour share using gross national income and removing distortions that stem from how multinational corporations
account for their global operations by excluding retained earnings of firms that have re-domiciled to Ireland, the depreciation of
foreignowned intellectual property assets located in Ireland, and the depreciation of aircraft owned by aircraft-leasing companies.
24
-
The low level of automation in the UK which Hal Varian has suggested could be linked to the size of the automobile and electronics
-
sectors may be one reason why the UK labour share has remained resilient.
raises risks of substantial skills mismatch, leading to increased structural unemployment and adverse
macroeconomic outcomes.
What could we do to shorten the lags? What does history teach us about building Whitaker's adaptability
today?
Institutions to Cushion the Blow and Speed the Transformation
In past industrial revolutions, the actions of public, private and third party institutions have helped shrink the
duration, impact and cost of the transition. It is worth reflecting on these interventions as we think about how
to manage the transition to the Fourth Industrial Revolution.25
The skills bases of workers were fundamentally transformed by a series of reforms to enabling institutions
including primary, secondary and tertiary education.26 New insurance institutions were created to support
those left behind in the transition, including unemployment insurance and universal health care.27 And
-
labour market institutions cooperatives, trades unions, and the introduction of a minimum wage and private
-
company pensions plugged gaps in provisions.28,29
Throughout these periods, many employers helped create an environment in which employees could thrive.
From charitable support in the First Industrial Revolution; to the Ford era of self-interested paternalism in
between, and the GooglePlex, self-contained communities of today, business has shaped the welfare of
many.
25
has also discussed these issues. See - speech given at The
My colleague Andy Haldane 'Ideas and Institutions A Growth Story',
Guild Society, Oxford, 23 May 2018.
26
In the UK in the late 18th and early 19th century, a mix of public, private and religious institutions - largely driven by charitable motives
- brought education to children working in mills. In the second and third revolutions, the state established formal primary, secondary
and tertiary education.
27
For example, in the First Industrial Revolution, with no welfare state and only the (dire) prospect of a Victorian workhouse, employees
set up Friendly Societies and Co-operatives to support colleagues falling on hard times. With trade unions outlawed until the end of the
period, it fell to the will of charitable industrialists, the likes of Robert Owen and Sir Titus Salt to improve conditions inside mills.
By the end of the Second Industrial Revolution, spurred by a more organised labour force, the Government provided welfare for its
population through workplace injury compensations, basic pensions and unemployment provisions. The interwar years ushered in
universal healthcare, unemployment insurance and pensions.
-
By the dawn of the 3rd Revolution, individual enterprise and privatisation were ascendant. Reform of social services to help create a
society of equal opportunity - followed, supported by increased public spending for maternity and child benefits, early years education,
and provisions for pensioners.
28
The number of Friendly Societies rose to 27,000 by the end of the 1800s and Trade Union membership quadrupled from 2 million in
1889 to 8.3 million by 1920. Spurred by industrial unrest, the state introduced the precursor to the minimum wage in the first decade of
the 1900s. Unionism has been in decline since the 1970s, with membership dipping below six million in 2012 for the first time since the
1940s.
29
Recent work indicates that trade unions in the US played an important role in supporting the wages of lower-skilled workers during the
years of the 3rd Industrial Revolution, thereby helping to limit increases in inequality over this period. See Farber, H S , Herbst, D,
Naidu, S (2018), 'Unions and Inequality over the Twentieth Century: New Evidence from Survey Data', NBER Working
Kuziemko, I and
Paper No. 24587.
So building on the past, what could be done this time?
First, everyone can contribute to a better understanding of the new skills that will be required. That includes
granular reviews by firms of the mismatches between their current talent pool and future needs; estimates
by the creators of general purpose technologies of the breadth of their potential applications; and reporting
by public institutions on the aggregate pace of automation and trends in the labour market.
The rate-limiting factor of technology adoption is often the skill-set of existing employees. For that reason
alone, business has an enormous interest in effective workforce training. And the providers of general-
purpose technologies have a responsibility to explore how they can develop their products in ways that
maximise job-creation or broader social benefits. For example, DeepMind established an Ethics and Society
Research Unit to help technologists put ethics into practice, and to help society anticipate and direct the
impact of AI so that it works for the many.
New labour market institutions will need to balance facilitating labour mobility and encouraging appropriate
protections of workers in non-standard forms of employment that emerge in industries, as considered in the
UK by the Taylor review of modern working practices.30
Other issues range from technology solutions to improve matching to news frameworks data portability
(including reputational histories).
Each industrial revolution has eventually been accompanied by major innovations in enabling or educational
institutions.
The biggest issue may be how to institutionalise re-training in mid-career and to integrate it with the social
welfare system.
The time for a quaternary system of education, founded on the same principle of universality as primary,
secondary and tertiary education may eventually arrive.
There are also roles for retraining schemes, such as the UK's Flexible Learning Fund31
and the Singapore
SkillsFuture programme, which offers all its citizens aged 25 and over £250 credit to pay for approved work-
skills related courses. Generous subsidies, of up to 90% for Singaporeans aged 40 and over, are available
on top of this credit. According to SkillsFuture's Chief Executive, the returns on that spending matter less
than changing the mindset around continuous reskilling.
An often overlooked but nonetheless critical element of the ecosystem is to build a financial sector consistent
with the new economy.
30
Available at https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices.
31
The Government has allocated £40m through the FLF in Spring2017 budget to run pilot projects.
Innovations in retail payments can transform checkout and ecommerce platforms can open new financing to
SMEs. Innovation in, and greater connectivity across, wholesale payment systems have the potential to cut
the costs of doing business across borders and unlock new trading opportunities. Intelligent use of big
financial datasets could transform credit markets, closing the gap between financing opportunities available
to small companies and those enjoyed by their larger competitors.
Given their position at the heart of the financial system, central banks have a crucial role to play in supporting
the development of this new finance, not least through creating the new infrastructure that it will require.32
Monetary Policy's Role in Managing the
Transition
As a former central banker, Whitaker would have recognised the importance of maintaining price stability
during periods of large structural change.
The appropriate setting of monetary policy will be influenced by the structural changes wrought by the Fourth
Industrial Revolution, including in the labour market, by its impact on price dynamics and on the equilibrium
rate of interest.
To be clear, as these structural changes are real in nature, monetary policy cannot prevent them, and it
would be unwise to attempt to accelerate them. For example, running the economy hotter is unlikely to be
effective at increasing the rate at which workers displaced by technology can find new roles because it does
not address the underlying frictions, particularly the lack of suitable skills.
However, as the structural changes take effect, they are likely to affect the balance between supply and
demand, and monetary policy will need to respond accordingly.
In the long run, the Fourth Industrial Revolution should substantially boost productivity and supply. Based on
past experience, the productivity of roles experiencing high levels of automation could expand at rates in
excess of 5% per year, and aggregate productivity growth could increase by as much as 1⁄2 to 11⁄2 percentage
points per year.33
The increases in supply from automation and the Fourth Industrial Revolution should, in time, lead to higher
demand as they flow through into higher incomes. With job destruction running ahead of the productivity and
creation effects in the shorter term, however, demand is likely to be weaker for a period.
32
For more details, see 'New Economy, New Finance, New Bank', speech by Mark Carney at the Mansion House, June 2018.
33
The lower estimate is based on the productivity gains realised from the introduction of steam power, while the upper estimate is based
Crafts, N (2015), 'Economic Growth: Onwards and Upwards?',
on the improvements harnessed from the ICT revolution. See Oxford
Review of Economic Policy, Vol. 31, pp. 217-241
As Chair Powell recently reminded us, the challenge for monetary policy during periods of structural change
is to take into account its potential impact on the underlying dynamics of the economy. That is why, in the
UK, the Monetary Policy Committee periodically takes stock of developments and updates its estimates of
key variables such as the equilibrium rates of interest and unemployment.34
-
The MPC provided our assessment of the equilibrium rate of interest the interest rate that sustains inflation
-
at target and output at potential in its August Inflation Report. The equilibrium interest rate provides a way
to think about the forces acting on the economy, and whether policy is stimulative or contractionary. It is
affected by shorter-term influences, such as headwinds to demand, and by slow-moving structural factors
that affect the balance between the demand for capital and the stock of wealth available to finance it. For
open economies like the UK and Ireland, those factors will be heavily influenced by global developments.
As the MPC noted at the time, increased automation could push the equilibrium interest rate up or down. On
that result could increase businesses' demand for capital,
the one hand, the increases in productivity
-
pushing up the equilibrium interest rate for a period and permanently if automation raises productivity
growth.35 On the other hand, however, increases in inequality would likely shift income to those with lower
propensities to consume,36 increasing the stock saving and pushing the equilibrium rate down.37
Monetary policy makers must also take into account how potential structural changes in the labour market
and pricing dynamics that result from the Fourth Industrial Revolution might affect the evolution of inflationary
pressures. These considerations can be illustrated using the Phillips Curve diagram.
Until the productivity and creativity effects catch up with the displacement effect, increased automation will
impart disinflationary pressures through a reduction in businesses' demand for labour relative
to supply.
-
Even if the transition happens relatively quickly and smoothly by historic standards taking 30 years and
with a relatively quick rate of new job finding among those displaced by technology - total hours worked
could be 2 per cent lower throughout, equivalent to a 2 percentage point increase in the unemployment rate
or a 5 percentage point rise in the underemployment rate.38
34
The Fourth Industrial Revolution could also affect the transmission of monetary policy through its effec