The number of bank tellers declined from an average of 20 per branch in 1988 to 13 in 2004, as ATMs replaced human tellers. This meant that the cost of running each branch fell. Banks responded by increasing the number of urban bank branches by 43% in the same time period, which increased the total number of bank employees. So ATMs shifted employees’ work from routine tasks like deposits and withdrawals towards skills machines cannot provide, such as sales and customer service. 

When the use of ATMs became more prevalent and reduced the overall costs to banks, in terms of the impact on labor, did the scale effect or the substitution effect dominate? On net, would labor and capital be considered substitutes or complements in this industry?