THE ADJUSTMENT OF LABOR MARKETS TO ROBOTS

We use detailed administrative data to study the adjustment of local labor markets to industrial robots in Germany. Robot exposure, as predicted by a shift-share variable, is associated with displacement effects in manufacturing, but those are fully offset by new jobs in services. The incidence mostly falls on young workers just entering the labor force. Automation is related to more stable employment within firms for incumbents, and this is driven by workers taking over new tasks in their original plants. Several measures indicate that those new jobs are of higher quality than the previous ones. Young workers also adapt their educational choices, and substitute away from vocational training towards colleges and universities. Finally, industrial robots have benefited workers in occupations with complementary tasks, such as managers or technical scientists.

Automated summary

The introduction of industrial robots in Germany has led to job displacement in manufacturing, but has also created new job opportunities in the service sector. The impact is mainly felt by young workers entering the labor force. Automation has resulted in more stable employment for existing employees within companies, with new jobs being of higher quality.