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How Robots Change Within-Firm Wage Inequality

Author

Listed:
  • Barth, Erling

    (Institute for Social Research, Oslo)

  • Roed, Marianne

    (Institute for Social Research, Oslo)

  • Schone, Pal

    (Institute for Social Research, Oslo)

  • Umblijs, Janis

    (Institute for Social Research, Oslo)

Abstract

Using novel matched employer-employee register data with firm-level information on the introduction of industrial robots, this paper analysis the impact of robots on the wages of workers in the manufacturing sector. The results show that industrial robots increase wages for high-skilled workers relative to low-skilled workers, hence robots increases the skill-premium within firms. Furthermore, we find that employees in managerial positions benefit more from robotisation than those in STEM or professional occupations. Overall, our results suggest that the introduction of industrial robots has a positive effect on the average wages of manufacturing workers in Norway.

Suggested Citation

  • Barth, Erling & Roed, Marianne & Schone, Pal & Umblijs, Janis, 2020. "How Robots Change Within-Firm Wage Inequality," IZA Discussion Papers 13605, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp13605
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    References listed on IDEAS

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    5. Barbieri, Laura & Mussida, Chiara & Piva, Mariacristina & Vivarelli, Marco, 2019. "Testing the Employment Impact of Automation, Robots and AI: A Survey and Some Methodological Issues," IZA Discussion Papers 12612, Institute of Labor Economics (IZA).
    6. Lachowska, Marta & Mas, Alexandre & Saggio, Raffaele & Woodbury, Stephen A., 2023. "Do firm effects drift? Evidence from Washington administrative data," Journal of Econometrics, Elsevier, vol. 233(2), pages 375-395.
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    8. repec:nbr:nberch:14019 is not listed on IDEAS
    9. Wolfgang Dauth & Sebastian Findeisen & Jens Suedekum & Nicole Woessner, 2018. "Adjusting to Robots: Worker-Level Evidence," Opportunity and Inclusive Growth Institute Working Papers 13, Federal Reserve Bank of Minneapolis.
    10. James Bessen & Maarten Goos & Anna Salomons & Wiljan van den Berge, 2020. "Firm-Level Automation: Evidence from the Netherlands," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 389-393, May.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Herbert Dawid & Michael Neugart, 2023. "Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model," Journal of Evolutionary Economics, Springer, vol. 33(1), pages 35-63, January.
    2. Uwe Thuemmel, 2023. "Optimal Taxation of Robots," Journal of the European Economic Association, European Economic Association, vol. 21(3), pages 1154-1190.
    3. Boddin, Dominik & Kroeger, Thilo, 2022. "Servitization, Inequality, and Wages," Labour Economics, Elsevier, vol. 77(C).
    4. Domini, Giacomo & Grazzi, Marco & Moschella, Daniele & Treibich, Tania, 2022. "For whom the bell tolls: The firm-level effects of automation on wage and gender inequality," Research Policy, Elsevier, vol. 51(7).
    5. Nikolas Zolas & Zachary Kroff & Erik Brynjolfsson & Kristina McElheran & David N. Beede & Cathy Buffington & Nathan Goldschlag & Lucia Foster & Emin Dinlersoz, 2020. "Advanced Technologies Adoption and Use by U.S. Firms: Evidence from the Annual Business Survey," NBER Working Papers 28290, National Bureau of Economic Research, Inc.
    6. Aksoy, Cevat Giray & Özcan, Berkay & Philipp, Julia, 2021. "Robots and the gender pay gap in Europe," European Economic Review, Elsevier, vol. 134(C).
    7. Deng, Liuchun & Müller, Steffen & Plümpe, Verena & Stegmaier, Jens, 2023. "Robots, Occupations, and Worker Age: A Production-Unit Analysis of Employment," IZA Discussion Papers 16128, Institute of Labor Economics (IZA).
    8. Nicoletta Corrocher & Daniele Moschella & Jacopo Staccioli & Marco Vivarelli, 2023. "Innovation and the Labor Market: Theory, Evidence and Challenges," DISCE - Quaderni del Dipartimento di Politica Economica dipe0033, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    9. Belloc, Filippo & Burdin, Gabriel & Landini, Fabio, 2020. "Robots and Worker Voice: An Empirical Exploration," IZA Discussion Papers 13799, Institute of Labor Economics (IZA).
    10. Filippo Belloc & Gabriel Burdin & Fabio Landini, 2023. "Advanced Technologies and Worker Voice," Economica, London School of Economics and Political Science, vol. 90(357), pages 1-38, January.
    11. Plümpe Verena & Stegmaier Jens, 2023. "Micro Data on Robots from the IAB Establishment Panel," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 243(3-4), pages 397-413, June.
    12. Klump, Rainer & Jurkat, Anne & Schneider, Florian, 2021. "Tracking the rise of robots: A survey of the IFR database and its applications," MPRA Paper 110390, University Library of Munich, Germany.
    13. Belloc, Filippo & Burdin, Gabriel & Landini, Fabio, 2022. "Robots, Digitalization, and Worker Voice," GLO Discussion Paper Series 1038, Global Labor Organization (GLO).
    14. Jurkat, Anne & Klump, Rainer & Schneider, Florian, 2023. "Robots and Wages: A Meta-Analysis," EconStor Preprints 274156, ZBW - Leibniz Information Centre for Economics.

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    More about this item

    Keywords

    automation; robotisation; labour economics; wages; technological change;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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