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Migration vs. automation as an answer to labour shortages: Firm-level analysis for Austria

Author

Listed:
  • Mahdi Ghodsi

    (The Vienna Institute for International Economic Studies, wiiw)

  • Sandra M. Leitner

    (The Vienna Institute for International Economic Studies, wiiw)

  • Maryna Tverdostup

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Labour shortages in Europe have led firms to adopt two key strategies automation and the employment of migrants. This study empirically examines the relationship between robot adoption and immigrant labour (differentiated by region of origin and education level) in Austrian firms using a novel dataset linking firm-level survey data on robotics adoption from Austria’s Information and Communication Technologies (IKTU ) surveys (waves 2018, 2020 and 2022) with registry-based employment records. Employing Poisson pseudo-maximum likelihood (PPML) estimations, we analyse firm-level employment decisions while controlling for firm characteristics, industry and region. Our findings show that firms adopting robots tend to employ more workers overall, particularly those with low and medium education levels. Notably, robot-adopting firms employ a higher share of low-educated migrants who are not from the European Economic Area (EEA), suggesting complementarity rather than substitution. However, automation appears to reduce the employment of highly educated migrant workers relative to natives. Distinguishing between industrial and service robots, we find that service robots have a stronger association with employment growth than industrial robots. The impact of robot adoption also differs by sector and is most pronounced in manufacturing, whereas its effects vary in the private service sectors. Our findings suggest that while automation can alleviate labour shortages, it may reinforce labour market segmentation. For EU policy makers, targeted interventions are needed to support the transition of migrant workers into higher-skilled occupations and to ensure that the benefits of automation are equitably distributed. Given the EU-wide relevance of automation and migration dynamics, these results provide insights that are also applicable beyond Austria.

Suggested Citation

  • Mahdi Ghodsi & Sandra M. Leitner & Maryna Tverdostup, 2025. "Migration vs. automation as an answer to labour shortages: Firm-level analysis for Austria," wiiw Working Papers 262, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:262
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    References listed on IDEAS

    as
    1. Huang, Keqi & Liu, Qiren & Tang, Chengjian, 2023. "Which firms benefit from robot adoption? Evidence from China," Journal of Asian Economics, Elsevier, vol. 86(C).
    2. Pellegrino, Gabriele & Piva, Mariacristina & Vivarelli, Marco, 2017. "Are Robots Stealing Our Jobs?," IZA Discussion Papers 10540, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Tesseltje de Lange & Mahdi Ghodsi & Maryna Tverdostup, 2025. "Migration or automation? Recommendations for how to better navigate labour shortages in the EU," wiiw Policy Notes 95, The Vienna Institute for International Economic Studies, wiiw.

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    More about this item

    Keywords

    Migration; automation; employment; firm- and worker-level analysis;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • 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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