Robots and Jobs in Europe – The effects are generally larger in countries with low or average levels of labour costs

The use of robots has multiplied during the last two decades. Between 2000 and 2017, robot exposure, as measured by the number of industrial robots per 1,000 workers, has quadrupled in Europe as a whole; and it has doubled in Germany, which deploys the highest number of robots per worker in Europe. In high-income countries, robot adoption has increased GDP, labour productivity, and wages. But it has also ignited fears, especially among policymakers and the general public, of considerable job losses. However, the international evidence on the employment effects of robot exposure is mixed. It has, for example, been reported that robot adoption has reduced total employment in the US, but not in Germany, where the decline in manufacturing employment was counterbalanced by an increase in employment in the service sector (Dauth et al. 2021). It also appears that the employment effects of robots may be dependent on the development level: while robot adoption was found to be associated with a decline in employment shares of jobs intensive in routine manual tasks in high-income countries, no such association was identified in emerging or in transition economies. The reasons for such cross-country differences, as well the labour market mechanisms behind the aggregate employment effects of automation, remain largely unexplored.

We study the effects of robot exposure on worker flows in 16 European countries between 1998-2017. Overall, we find small negative effects on job separations and small positive effects on job findings. Labour costs are shown to be a major driver of cross-country differences: the effects of robot exposure are generally larger in absolute terms in countries with low or average levels of labour costs than in countries with high levels of labour costs. These effects are particularly pronounced for workers in occupations intensive in routine manual or routine cognitive tasks, but are insignificant in occupations intensive in non-routine cognitive tasks. For young and old workers in countries with low levels of labour costs, robot exposure had a beneficial effect on transitions. Our results imply that robot adoption increased employment and reduced unemployment most in the European countries with low or average levels of labour costs.

Chosen excerpts by Job Market Monitor. Read the whole story @  The Impact of Robots on Labour Market Transitions in Europe | IZA – Institute of Labor Economics