IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v176y2022ics0040162521008040.html
   My bibliography  Save this article

COVID-19 and automation in a developing economy: Evidence from Chile

Author

Listed:
  • Egana-delSol, Pablo
  • Cruz, Gabriel
  • Micco, Alejandro

Abstract

This paper analyzes the Covid-19 pandemic impact of the global process of automation on employment in a developing economy. This is particularly interesting because developing economies characteristics, such as having larger informal sectors and weaker social safety nets, shapes the impact of automation on labor markets. We show that occupations with a higher risk of automation exhibit the most significant employment contraction. More specifically, we find that one standard deviation higher in sectoral share of employment in occupations at risk of automation (OaRA) implied around 7% less employment on average between the last quarter of 2019 and the first quarter of 2021. The effect on informal employees is three times more in comparison to formal employees, and the estimation for self-employed workers is not statistically significant. We also find that employees in sector with relatively low compared to high wages, both vis-à-vis the US, exhibit a 20% smaller reaction on employment due to the pandemic restrictions. We do not find robust evidence showing that the employment contraction has been larger among female workers or in jobs with higher at-work physical proximity, but we do find a positive relationship related to the capacity of working remotely.

Suggested Citation

  • Egana-delSol, Pablo & Cruz, Gabriel & Micco, Alejandro, 2022. "COVID-19 and automation in a developing economy: Evidence from Chile," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    • Handle: RePEc:eee:tefoso:v:176:y:2022:i:c:s0040162521008040
    DOI: 10.1016/j.techfore.2021.121373
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162521008040
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2021.121373?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nir Jaimovich & Henry E. Siu, 2020. "Job Polarization and Jobless Recoveries," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 129-147, March.
    2. Costas Meghir & Renata Narita & Jean-Marc Robin, 2015. "Wages and Informality in Developing Countries," American Economic Review, American Economic Association, vol. 105(4), pages 1509-1546, April.
    3. Alejandro Micco, 2019. "The Impact of Automation in Developed Countries," Working Papers wp480, University of Chile, Department of Economics.
    4. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
    5. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    6. Nam, Taewoo, 2019. "Technology usage, expected job sustainability, and perceived job insecurity," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 155-165.
    7. Dingel, Jonathan I. & Neiman, Brent, 2020. "How many jobs can be done at home?," Journal of Public Economics, Elsevier, vol. 189(C).
    8. Hoehn-Velasco, Lauren & Silverio-Murillo, Adan & Balmori de la Miyar, Jose Roberto, 2021. "The long downturn: The impact of the great lockdown on formal employment," Journal of Economics and Business, Elsevier, vol. 115(C).
    9. Béland, Louis-Philippe & Brodeur, Abel & Wright, Taylor, 2020. "The Short-Term Economic Consequences of COVID-19: Exposure to Disease, Remote Work and Government Response," GLO Discussion Paper Series 524, Global Labor Organization (GLO).
    10. David H. Autor & Michael J. Handel, 2013. "Putting Tasks to the Test: Human Capital, Job Tasks, and Wages," Journal of Labor Economics, University of Chicago Press, vol. 31(S1), pages 59-96.
    11. Coibion, Olivier & Gorodnichenko, Yuriy & Weber, Michael, 2020. "Labor Markets During the Covid-19 Crisis: A Preliminary View," Department of Economics, Working Paper Series qt7rx7t91p, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    12. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1279-1333.
    13. Andrew Atkeson, 2020. "How Deadly is COVID-19? Understanding the Difficulties with Estimation of its Fatality Rate," Staff Report 598, Federal Reserve Bank of Minneapolis.
    14. Teresa C. Fort, 2017. "Technology and Production Fragmentation: Domestic versus Foreign Sourcing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 84(2), pages 650-687.
    15. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis, 2020. "COVID-19 Is Also a Reallocation Shock," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 51(2 (Summer), pages 329-383.
    16. Daron Acemoglu & Pascual Restrepo, 2018. "The Race between Man and Machine: Implications of Technology for Growth, Factor Shares, and Employment," American Economic Review, American Economic Association, vol. 108(6), pages 1488-1542, June.
    17. Dengler, Katharina & Matthes, Britta, 2018. "The impacts of digital transformation on the labour market: Substitution potentials of occupations in Germany," Technological Forecasting and Social Change, Elsevier, vol. 137(C), pages 304-316.
    18. Mariya Brussevich & Era Dabla-Norris & Christine Kamunge & Pooja Karnane & Salma Khalid & Kalpana Kochhar, 2018. "Gender, Technology, and the Future of Work," IMF Staff Discussion Notes 18/07, International Monetary Fund.
    19. repec:hal:spmain:info:hdl:2441/4ra95789n9nrr59b6lmini6tp is not listed on IDEAS
    20. Daniela Del Boca & Noemi Oggero & Paola Profeta & Mariacristina Rossi, 2020. "Women’s and men’s work, housework and childcare, before and during COVID-19," Review of Economics of the Household, Springer, vol. 18(4), pages 1001-1017, December.
    21. Mariya Brussevich & Ms. Era Dabla-Norris & Christine Kamunge & Pooja Karnane & Salma Khalid & Ms. Kalpana Kochhar, 2018. "Gender, Technology, and the Future of Work," IMF Staff Discussion Notes 2018/007, International Monetary Fund.
    22. Norman V. Loayza & Steven Pennings, 2020. "Macroeconomic Policy in the Time of COVID-19," World Bank Publications - Reports 33540, The World Bank Group.
    23. Sungki Hong & Devin Werner, 2020. "U.S. States Hit the Hardest by COVID-19 Have Lower Unemployment Risks," Economic Synopses, Federal Reserve Bank of St. Louis, issue 12, April.
    24. Costas Meghir & Renata Narita & Jean-Marc Robin, 2015. "Wages and Informality in Developing Countries," Post-Print hal-03587627, HAL.
    25. Gruetzemacher, Ross & Paradice, David & Lee, Kang Bok, 2020. "Forecasting extreme labor displacement: A survey of AI practitioners," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    26. Brougham, David & Haar, Jarrod, 2020. "Technological disruption and employment: The influence on job insecurity and turnover intentions: A multi-country study," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    27. Melanie Arntz & Terry Gregory & Ulrich Zierahn, 2016. "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis," OECD Social, Employment and Migration Working Papers 189, OECD Publishing.
    28. Dimitris Papanikolaou & Lawrence D W Schmidt, 2022. "Working Remotely and the Supply-Side Impact of COVID-19 [The unprecedented stock market reaction to COVID-19]," The Review of Asset Pricing Studies, Society for Financial Studies, vol. 12(1), pages 53-111.
    29. Kopytov, Alexandr & Roussanov, Nikolai & Taschereau-Dumouchel, Mathieu, 2018. "Short-run pain, long-run gain? Recessions and technological transformation," Journal of Monetary Economics, Elsevier, vol. 97(C), pages 29-44.
    30. Titan Alon & Matthias Doepke & Jane Olmstead-Rumsey & Michèle Tertilt, 2020. "The Impact of COVID-19 on Gender Equality," CRC TR 224 Discussion Paper Series crctr224_2020_163, University of Bonn and University of Mannheim, Germany.
    31. Frey, Carl Benedikt & Osborne, Michael A., 2017. "The future of employment: How susceptible are jobs to computerisation?," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 254-280.
    32. Loayza,Norman V. & Pennings,Steven Michael, 2020. "Macroeconomic Policy in the Time of COVID-19 : A Primer for Developing Countries," Research and Policy Briefs 147291, The World Bank.
    33. Daniel Garrote Sanchez & Nicolas Gomez Parra & Caglar Ozden & Bob Rijkers, 2020. "Which Jobs Are Most Vulnerable to COVID-19? What an Analysis of the European Union Reveals," World Bank Publications - Reports 33737, The World Bank Group.
    34. Goolsbee, Austan & Syverson, Chad, 2021. "Fear, lockdown, and diversion: Comparing drivers of pandemic economic decline 2020," Journal of Public Economics, Elsevier, vol. 193(C).
    35. Ljubica Nedelkoska & Glenda Quintini, 2018. "Automation, skills use and training," OECD Social, Employment and Migration Working Papers 202, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kraus, Sascha & Kumar, Satish & Lim, Weng Marc & Kaur, Jaspreet & Sharma, Anuj & Schiavone, Francesco, 2023. "From moon landing to metaverse: Tracing the evolution of Technological Forecasting and Social Change," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    2. Lee, Lillian & Chowdhury, Anup & Shubita, Moade, 2023. "Impact of Paris Agreement on financing strategy: Evidence from global FPSO industry," Technological Forecasting and Social Change, Elsevier, vol. 188(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Egana-delSol, Pablo & Bustelo, Monserrat & Ripani, Laura & Soler, Nicolas & Viollaz, Mariana, 2022. "Automation in Latin America: Are Women at Higher Risk of Losing Their Jobs?," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    2. Guendalina Anzolin, 2021. "Automation and its Employment Effects: A Literature Review of Automotive and Garment Sectors," JRC Working Papers on Labour, Education and Technology 2021-16, Joint Research Centre.
    3. Jean-Philippe Deranty & Thomas Corbin, 2022. "Artificial Intelligence and work: a critical review of recent research from the social sciences," Papers 2204.00419, arXiv.org.
    4. Azio Barani, 2021. "Innovazione tecnologica e lavoro: automazione, occupazione e impatti socio-economici," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 0(114), pages 51-79.
    5. Montobbio, Fabio & Staccioli, Jacopo & Virgillito, Maria Enrica & Vivarelli, Marco, 2022. "Robots and the origin of their labour-saving impact," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    6. 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).
    7. Fossen, Frank M. & Sorgner, Alina, 2022. "New digital technologies and heterogeneous wage and employment dynamics in the United States: Evidence from individual-level data," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    8. Cirillo, Valeria & Evangelista, Rinaldo & Guarascio, Dario & Sostero, Matteo, 2021. "Digitalization, routineness and employment: An exploration on Italian task-based data," Research Policy, Elsevier, vol. 50(7).
    9. László Czaller & Rikard H. Eriksson & Balázs Lengyel, 2021. "Reducing automation risk through career mobility: Where and for whom?," Papers in Regional Science, Wiley Blackwell, vol. 100(6), pages 1545-1569, December.
    10. Fernández-Macías, Enrique & Klenert, David & Antón, José-Ignacio, 2021. "Not so disruptive yet? Characteristics, distribution and determinants of robots in Europe," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 76-89.
    11. Damioli, G. & Van Roy, V. & Vertesy, D. & Vivarelli, M., 2021. "May AI revolution be labour-friendly? Some micro evidence from the supply side," GLO Discussion Paper Series 823, Global Labor Organization (GLO).
    12. Jasmine Mondolo, 2022. "The composite link between technological change and employment: A survey of the literature," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1027-1068, September.
    13. Arntz, Melanie & Gregory, Terry & Zierahn, Ulrich, 2019. "Digitalization and the Future of Work: Macroeconomic Consequences," IZA Discussion Papers 12428, Institute of Labor Economics (IZA).
    14. Fierro, Luca Eduardo & Caiani, Alessandro & Russo, Alberto, 2022. "Automation, Job Polarisation, and Structural Change," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 499-535.
    15. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2022. "Technological paradigms, labour creation and destruction in a multi-sector agent-based model," Research Policy, Elsevier, vol. 51(10).
    16. Sergio De Nardis & Francesca Parente, 2022. "Technology and task changes in the major EU countries," Contemporary Economic Policy, Western Economic Association International, vol. 40(2), pages 391-413, April.
    17. Roberto Antonietti & Luca Cattani & Francesca Gambarotto & Giulio Pedrini, 2021. "Education, routine, and complexity-biased Knowledge Enabling Technologies: Evidence from Emilia-Romagna, Italy," Discussion Paper series in Regional Science & Economic Geography 2021-07, Gran Sasso Science Institute, Social Sciences, revised May 2021.
    18. Damioli, Giacomo & Van Roy, Vincent & Vertesy, Daniel & Vivarelli, Marco, 2021. "Will the AI revolution be labour-friendly? Some micro evidence from the supply side," MERIT Working Papers 2021-016, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    19. repec:gdk:wpaper:66 is not listed on IDEAS
    20. 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).
    21. Alonso, Cristian & Berg, Andrew & Kothari, Siddharth & Papageorgiou, Chris & Rehman, Sidra, 2022. "Will the AI revolution cause a great divergence?," Journal of Monetary Economics, Elsevier, vol. 127(C), pages 18-37.

    More about this item

    Keywords

    Automation; Computerization; Covid-19; Labor market; Employment; Technological change;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:176:y:2022:i:c:s0040162521008040. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.