Return of the Solow Paradox? IT, Productivity, and Employment in US Manufacturing

• Main Authors: Acemoglu, Daron (Contributor), Price, Brendan (Author), Autor, David H. (Contributor), Dorn, David (Author), Hanson, Gordon H. (Author), Price, Brendan Michael (Contributor)
• Other Authors: Massachusetts Institute of Technology. Department of Economics (Contributor)
• Format: Article
• Language: English
• Published: American Economic Association, 2015-03-06T20:28:22Z.
• Subjects: Article
• Online Access: Get fulltext

 An increasingly influential "technological-discontinuity" paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using US manufacturing industries. There is some limited support for more rapid productivity growth in IT-intensive industries depending on the exact measures, though not since the late 1990s. Most challenging to this paradigm, and to our expectations, is that output contracts in IT-intensive industries relative to the rest of manufacturing. Productivity increases, when detectable, result from the even faster declines in employment.