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Automation and labour market dynamics in the UK

Author

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  • Rebecca Olatunbosun, Abosede
  • Emmanuel Olatunbosun, Iyanu

Abstract

Introduction: The advancement of artificial intelligence (AI) and workplace automation in the twenty-first century has significantly accelerated industrial growth and innovation. These technologies enhance productivity, support profit maximisation, and reduce certain labour-related pressures as machines increasingly perform tasks previously handled by human workers. Given these developments, this study examines how rising automation influences unemployment in the United Kingdom. Methods: The study draws on secondary national data covering robot installation figures, unemployment rates, the national minimum wage, and major economic growth indicators. Descriptive statistics were used to summarise trends, while breakpoint unit root tests assessed structural shifts in the data. A generalised method of moments (GMM) regression model was then employed to estimate the relationship between automation and unemployment. Results: The findings indicate that increased automation is associated with higher unemployment levels in the UK. This result mirrors evidence reported in previous studies conducted in the United States and Germany, suggesting a broader pattern across advanced economies. Conclusion: The study concludes that although automation drives productivity and innovation, it also heightens unemployment risks in the short to medium term. To prevent a potential labour market crisis, strategic workforce reskilling and proactive policy measures are essential.

Suggested Citation

  • Rebecca Olatunbosun, Abosede & Emmanuel Olatunbosun, Iyanu, 2025. "Automation and labour market dynamics in the UK," SAP Netnography, South American Publishing.
    • Handle: RePEc:cwf:netart:net2025304
    DOI: 10.62486/net2025304
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    References listed on IDEAS

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    1. Joseph Zeira, 1998. "Workers, Machines, and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1091-1117.
    2. 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.
    3. Daron Acemoglu & Pascual Restrepo, 2017. "Robots and Jobs: Evidence from US Labor Markets," Boston University - Department of Economics - Working Papers Series dp-297, Boston University - Department of Economics.
    4. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    5. Georg Graetz & Guy Michaels, 2018. "Robots at Work," The Review of Economics and Statistics, MIT Press, vol. 100(5), pages 753-768, December.
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