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Automation and labor force participation in advanced economies: Macro and micro evidence

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  • Grigoli, Francesco
  • Koczan, Zsoka
  • Topalova, Petia

Abstract

Technological advances raise productivity and growth, but are also likely to reshape labor markets. We examine the impact of automation on aggregate labor force participation rates and individuals’ attachment to the workforce in advanced economies. Cross-country analysis, which leverages the variation in the routinizability of occupations and occupational composition, points to significant negative effects of automation on the participation rates of prime-age men and women. Individual-level analysis confirms that workers previously employed in routinizable occupations are more likely to drop out of the labor force. Encouragingly, higher spending on active labor market programs and education are, however, associated with smaller negative effects of technological change on participation.

Suggested Citation

  • Grigoli, Francesco & Koczan, Zsoka & Topalova, Petia, 2020. "Automation and labor force participation in advanced economies: Macro and micro evidence," European Economic Review, Elsevier, vol. 126(C).
    • Handle: RePEc:eee:eecrev:v:126:y:2020:i:c:s0014292120300751
    DOI: 10.1016/j.euroecorev.2020.103443
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    5. Aksoy, Cevat Giray & Özcan, Berkay & Philipp, Julia, 2021. "Robots and the gender pay gap in Europe," European Economic Review, Elsevier, vol. 134(C).
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    8. Bürgisser, Reto, 2023. "Policy Responses to Technological Change in the Workplace," SocArXiv kwxn2, Center for Open Science.
    9. Melek Cil & Yildiz Yilmaz Guzey, 2024. "Technology and gender: Understanding the changing dynamics of female unemployment in the G7 countries," Journal of New Economy, Ural State University of Economics, vol. 25(1), pages 26-49, April.
    10. Gábor Szabó-Szentgróti & Bence Végvári & József Varga, 2021. "Impact of Industry 4.0 and Digitization on Labor Market for 2030-Verification of Keynes’ Prediction," Sustainability, MDPI, vol. 13(14), pages 1-19, July.
    11. María García-Vega, 2020. "R&D restructuring during the Great Recession and young firms," Discussion Papers 2020-09, University of Nottingham, GEP.
    12. Caselli, Mauro & Fracasso, Andrea & Traverso, Silvio, 2021. "Robots and risk of COVID-19 workplace contagion: Evidence from Italy," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    13. Ilona Pavlenkova & Luca Alfieri & Jaan Masso, 2021. "Effects Of Automation On The Gender Pay Gap: The Case Of Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 131, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    14. Beier, Grischa & Matthess, Marcel & Shuttleworth, Luke & Guan, Ting & de Oliveira Pereira Grudzien, David Iubel & Xue, Bing & Pinheiro de Lima, Edson & Chen, Ling, 2022. "Implications of Industry 4.0 on industrial employment: A comparative survey from Brazilian, Chinese, and German practitioners," Technology in Society, Elsevier, vol. 70(C).
    15. Laura Bisio & Angelo Cuzzola & Marco Grazzi & Daniele Moschella, 2023. "The Dynamics of Automation Adoption: Firm-Level Heterogeneity and Aggregate Employment Effects," CESifo Working Paper Series 10697, CESifo.
    16. Wang, Linhui & Cao, Zhanglu & Dong, Zhiqing, 2023. "Are artificial intelligence dividends evenly distributed between profits and wages? Evidence from the private enterprise survey data in China," Structural Change and Economic Dynamics, Elsevier, vol. 66(C), pages 342-356.
    17. Carbonero, Francesco & Scicchitano, Sergio, 2021. "Labour and technology at the time of Covid-19. Can artificial intelligence mitigate the need for proximity?," GLO Discussion Paper Series 765, Global Labor Organization (GLO).
    18. Ulrike Huemer, 2022. "Qualifizierung als Mittel zur Hebung der Beschäftigungsquote," WIFO Monatsberichte (monthly reports), WIFO, vol. 95(7), pages 457-466, July.
    19. Lee, Chien-Chiang & Wang, Chih-Wei & Ho, Shan-Ju, 2022. "The dimension of green economy: Culture viewpoint," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 122-138.
    20. Chuan, A. & Zhang, W., 2021. "Non-College Occupations, Workplace Routinization, and the Gender Gap in College Enrollment," Cambridge Working Papers in Economics 2177, Faculty of Economics, University of Cambridge.
    21. Xiao Shen & Jingbo Liang & Jiangning Cao & Zhengwen Wang, 2022. "How Population Aging Affects Industrial Structure Upgrading: Evidence from China," IJERPH, MDPI, vol. 19(23), pages 1-23, December.
    22. García-Vega, María, 2022. "R&D restructuring during the Great Recession and young firms," International Journal of Industrial Organization, Elsevier, vol. 81(C).
    23. Kerstin Hotte & Melline Somers & Angelos Theodorakopoulos, 2022. "Technology and jobs: A systematic literature review," Papers 2204.01296, arXiv.org.

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    More about this item

    Keywords

    Labor force participation; Technology; Automation; Routinization;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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