Automation and Low-Skill Labor

Katja Mann () and Dario Pozzoli
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Katja Mann: Copenhagen Business School

No 15791, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Changes in the supply of low-skill labor may affect robot adoption by firms. We test this hypothesis by exploiting an exogenous increase in the local labor supply induced by a large influx of immigrants into Danish municipalities. Using the Danish employer-employee matched dataset over the period 1995-2019, we show in a shift-share regression that a larger share of migrants in a municipality leads to fewer imports of robots at the firm-level. We rationalize this finding in a simple model of robot adoption in which robots and low-skill workers are substitutes. As many advanced economies are facing labor shortages, this paper sheds light on the future of robotization.

Keywords: labor supply; immigration; robots; shift-share (search for similar items in EconPapers)
JEL-codes: E22 J20 J61 R23 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2022-12
New Economics Papers: this item is included in nep-lab, nep-mig, nep-tid and nep-ure
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