Centre for Development Economics
Department of Economics
Delhi School of Economics
ANNOUNCE A SEMINAR
Automation and Employment Recovery After the Great Recession
by
Lalit Contractor
(Ashoka University)
with
Ronit Mukherji and Abhishek Rai
(Ashoka University)
(Thursday, October 9, 2025, at 3:10 PM, IST )
Venue: Amex Room
Abstract:-
We document a novel empirical finding: U.S. regions with higher pre-Great Recession exposure to automation experienced significantly faster employment recoveries after the recession. To explain this result, we develop a simple model of firm heterogeneity with capital accumulation. The model predicts that, following a transitory negative TFP shock, economies with higher automation intensity recover more quickly than those with lower automation intensity. In less automation-intensive regions, firms start with relatively lower levels of automation capital, and this gap is exacerbated during the shock. As a result, these regions benefit less from the complementarity between automation capital and labour, leading to a slower employment recovery.