Publisher:
IZA - Institute of Labor Economics, Bonn, Germany
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...
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ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
Signature:
DS 4
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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.
