Date: Tuesday, 22 October 2024, at 12:15 pm
Venue: Seminar Room Bruguier Pacini, DEM
Speaker and Title:
Julian Tiedtke (Sant’Anna School of Advanced Studies)
Automation, Firm Size, and Skill Groups
Abstract:
Recent advances in automation technology and their rapid diffusion across industrialized economies have raised concerns about their potential adverse effects on employment and inequality. Despite growing empirical literature on this topic, significant controversy remains regarding the impact of automation on labor markets.
This paper investigates the impact of investments in automation-related goods on firm- and worker-level outcomes in Portugal from 2004 to 2021. Combining linked employer-employee data, firm balance sheets, and trade transaction data related to automation imports, we estimate the effects of automation adoption using a difference-in-differences design that exploits the lumpiness of imports in product categories linked to automation technologies.
Our study contributes to the literature in three key ways: First, we provide some stylized facts about automation investments by Portuguese firms. Second, we find that, on average, firms experience an increase in employment following automation events. Third, we reveal significant heterogeneity in these effects: small firms typically see employment growth post-automation, whereas medium and large firms often experience employment declines.
Furthermore, our analysis of worker-level impacts shows that employment shares for low-education workers, those in routine-intensive jobs, and blue-collar workers increase following automation events, challenging the dominant narrative that automation is skill-biased. Instead, our findings lend support to the deskilling hypothesis. These results underscore the importance of the socio-economic context in shaping the effects of automation.
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