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The Impact of Digitization on Labor Markets, Product Quality and Information

Sep 2017 to Sep 2019



Stanford Cyber Initiative

Automation through both robotics and software is quickly diffusing, and digital platforms continue to expand, with profound implications for labor markets and democracy. First, the effect of automation on labor markets has been the subject of much debate, but little rigorous analysis. This project builds an economic model and uses it to evaluate conditions under which automation causes large increases in inequality or poverty. The project will develop empirical estimates of factors such as those that relate to preferences around transportation (which will be impacted by automation), including workers’ willingness to commute and move. Second, marketplaces and platforms serve as intermediaries between consumers and the goods and services they consume; they also determine who supplies those goods and services, and indirectly, their quality and composition. Platforms affect labor market opportunities of individuals, as well as labor market equilibrium. Platforms often provide flexibility for workers, and enable new approaches to incentivize quality. This project measures these effects in several industries, including services (ridesharing, dog-sitting, and rooms) and markets for news, which is fundamental to democracy. New algorithms for improving the performance of marketplaces as well as the efficiency of government will be developed and deployed, and their performance evaluated.