Automation and Low-skill Labor

Research output: Working paperResearch

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.
Original languageEnglish
Place of PublicationBonn
PublisherIZA
Number of pages32
Publication statusPublished - Dec 2022
SeriesIZA Discussion Paper
Number15791
ISSN2365-9793

Keywords

  • Labor supply
  • Immigration
  • Robots
  • Shift-share

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