Small cities face greater impact from automation

Abstract

The city has proved to be the most successful form of human agglomeration and provides wide employment opportunities for its dwellers. As advances in robotics and artificial intelligence revive concerns about the impact of automation on jobs, a question looms: how will automation affect employment in cities? Here, we provide a comparative picture of the impact of automation across US urban areas. Small cities will undertake greater adjustments, such as worker displacement and job content substitutions. We demonstrate that large cities exhibit increased occupational and skill specialization due to increased abundance of managerial and technical professions. These occupations are not easily automatable, and, thus, reduce the potential impact of automation in large cities. Our results pass several robustness checks including potential errors in the estimation of occupational automation and subsampling of occupations. Our study provides the first empirical law connecting two societal forces: urban agglomeration and automation’s impact on employment.