Automation and Employment Recovery After the Great Recession by Ronit Mukherji

Join us for this week's Macroeconomics Research Seminar, Spring Term 2026.

Ronit Mukherji, from Ashoka University, will present this week's Macroeconomics seminar on Automation and Employment Recovery After the Great Recession.

Abstract

This paper studies how automation shapes employment recoveries in response to a recessionary shock. We find that 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 model of firm heterogeneity with automation investment subject to cash flow constraints. The model predicts a faster employment recovery in more automated regions following a transitory negative TFP shock. Firms in these regions are automation capital intensive, allowing them to better withstand both the adverse impact of the shock as well as the dampening role of the cash-flow constraint along the recovery path. As a result, these regions benefit from the complementarity between automation capital and labour, leading to a faster employment recovery.

This seminar will be held on campus in 5B.307 at 1.30pm on Tuesday, 3 March 2026. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.