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What Happens to Workers at Firms that Automate?

Author

Listed:
  • James Bessen

    (Boston University)

  • Maarten Goos

    (Utrecht University and Tilburg University)

  • Anna Salomons

    (Utrecht University and Tilburg University)

  • Wiljan van den Berge

    (Utrecht University)

Abstract

We estimate the impact of firm-level automation on individual worker outcomes by combining Dutch microdata with a direct measure of automation expenditures covering all private nonfinancial sector firms. Using a novel difference-in-differences event-study design leveraging lumpy investment, we find that automation increases the probability of incumbent workers separating from their employers. Workers experience a five-year cumulative wage income loss of 9% of one year’s earnings, driven by decreases in days worked. These adverse impacts of automation are larger in smaller firms, and for older and middle-educated workers. By contrast, no such losses are found for firms’ investments in computers.

Suggested Citation

  • James Bessen & Maarten Goos & Anna Salomons & Wiljan van den Berge, 2025. "What Happens to Workers at Firms that Automate?," The Review of Economics and Statistics, MIT Press, vol. 107(1), pages 125-141, January.
    • Handle: RePEc:tpr:restat:v:107:y:2025:i:1:p:125-141
    DOI: 10.1162/rest_a_01284
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    Cited by:

    1. Chen, Xiaoxiao & Yang, Jiayi & Wu, Bo, 2025. "How is artificial intelligence shaping the labor demand of firms? ——evidence from text-mining analysis of listed companies," Telecommunications Policy, Elsevier, vol. 49(10).
    2. Andreas Stöckl & Olaf Struck, 2025. "Continuous vocational education and training and new technologies: on the importance of educational level and technology in the workplace," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 59(1), pages 1-21, December.
    3. Dabed, Diego & Genz, Sabrina & Rademakers, Emilie, 2025. "Equalising the effects of automation? The role of task overlap for job finding," Labour Economics, Elsevier, vol. 96(C).
    4. Holtmann, Svea & Braun, Anna-Sophie & Cho, Jae & Koch, Reinald & Langenmayr, Dominika, 2025. "Investment effects of a quasi-robot tax: Evidence from South Korea," arqus Discussion Papers in Quantitative Tax Research 308, arqus - Arbeitskreis Quantitative Steuerlehre.
    5. Lee, Seungil & Park, Jungsoo, 2026. "Impact of digital transformation technology adoption on worker wages," Research Policy, Elsevier, vol. 55(2).
    6. Xienan Cheng & Mustafa Dogan & Pinar Yildirim, 2025. "Artificial Intelligence in Team Dynamics: Who Gets Replaced and Why?," Papers 2506.12337, arXiv.org, revised May 2026.
    7. Chun, Hyunbae & Shin, Donghan, 2025. "Beyond automation: The multifaceted impact of advanced digital technologies on employment dynamics," Research Policy, Elsevier, vol. 54(10).
    8. Michael Otto & Martin Abraham, 2025. "Robotisation and Workforce Dynamics: Analysing Employment and Wage Effects within Manufacturing Establishments," Work, Employment & Society, British Sociological Association, vol. 39(6), pages 1486-1512, December.
    9. Lipowski, Cäcilia & Salomons, Anna & Zierahn-Weilage, Ulrich, 2024. "Expertise at work: New technologies, new skills, and worker impacts," ZEW Discussion Papers 24-044, ZEW - Leibniz Centre for European Economic Research.
    10. Muehlemann, Samuel, 2025. "Artificial intelligence adoption and workplace training," Journal of Economic Behavior & Organization, Elsevier, vol. 238(C).
    11. Muffert, Johanna & Winkler, Erwin, 2025. "Using Machine Learning to Understand the Heterogeneous Earnings Effects of Exports," IZA Discussion Papers 17667, IZA Network @ LISER.
    12. Gallen, Trevor & Kim, Soojin, 2025. "Automation and heterogeneous earnings dynamics," Economics Letters, Elsevier, vol. 255(C).
    13. gert Bijnens & Joep Konings & Aaron Putseys, 2025. "Unveiling the J-curve: How Intangibles Drive Productivity Mismeasurement," Working Papers of VIVES - Research Centre for Regional Economics 779815, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    14. Jozef Konings & Aaron Putseys, 2026. "The impact of on-the-job training subsidies on firm-level outcomes: evidence from Flemish SMEs," Small Business Economics, Springer, vol. 66(3), pages 977-1003, March.
    15. Meghana Ayyagari & Vojislav Maksimovic & Rodimiro Rodrigo & Ariel Weinberger, 2026. "Automation Under Constraints: Exchange Rates Interest Rates and Investment," CESifo Working Paper Series 12526, CESifo.
    16. Jiang, Li & Li, Bin & Zhang, Min, 2025. "The impact of digital transformation on the efficiency of corporate resource allocation: Internal mechanisms and external environment," Technological Forecasting and Social Change, Elsevier, vol. 215(C).

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