The Labor Markets and Automation: Linking the Labor Market Structures to the Employment Outcome of Automation

Rikke Bang Helvind

Student thesis: Master thesis

Abstract

It is not a new phenomenon that humans are confronted with technological developments that challenge labor and occupation norms. However, despite the vast research on the employment implication, uncertainty still very much persist regarding the employment outcome of such automation. This thesis argues that some the ambivalence in the results of existing research can be attributed the difference in countries’ labor market structures. Thus, this thesis presents an effort to assess the relationship between employment outcome of automation and labor market structures. Within the philosophy of critical realism, this thesis is based on a mixed-method research design to examine the causal mechanisms leading to the country-specific employment outcome of the automation found in the labor market structures. This research is carried out in the form of a comparative case study of Denmark and France utilizing their apparent differences in labor market structures yet equal levels of automatability. Within the structure of the Task-Based Framework, this thesis utilizes the EU KLEMS data for a panel data study of the effect of ICT intensity, an empirical proxy for automation, on employment growth in the period 1975-2015. The quantitative results are further assessed along with the labor market structures through the Varieties of Capitalism approach. This paper firstly finds that France mainly have experienced relatively large positive employment effects of automation, while Denmark have mainly experienced small negative effects. This paper did not find evidence indicating that the labor market structures directly influence whether the employment outcome of automation is positive or negative. However, flexibility within the labor market and access to risk-willing capital can affect the magnitude of automation’s effect on the labor market. More specifically, the findings of this thesis show how agile labor markets structures enable a compositional effect on employment within and among industries and thus allow the economy to respond more dynamically to the new production schemes and work organizations following the technological progress.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages140
SupervisorsKarl Harmenberg