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Organized labor versus robots? Evidence from micro data

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  • Findeisen, Sebastian
  • Dauth, Wolfgang
  • Schlenker, Oliver

Abstract

New technologies drive productivity growth but the distribution of gains might be unequal and is mediated by labor market institutions. We study the role that organized labor plays in shielding incumbent workers from the potential negative consequences of automation. Combining German individual-level administrative records with information on plant-level robot adoption and the presence of works councils, a form of shop-floor worker representation, we find positive moderating effects of works councils on retention for incumbent workers during automation events. Separations for workers with replaceable task profiles are significantly reduced. When labor markets are tight and replacement costs are high for firms, incumbent workers become more valuable and the effects of works councils during automation events start to disappear. Older workers, who find it more challenging to reallocate to new employers, benefit the most from organized labor in terms of wages employment. Concerning mechanisms we find that robot-adopting plants with works councils employ not more but higher quality robots. They also provide more training during robot adoption and have higher productivity growth thereafter.

Suggested Citation

  • Findeisen, Sebastian & Dauth, Wolfgang & Schlenker, Oliver, 2024. "Organized labor versus robots? Evidence from micro data," Working Papers 25, University of Konstanz, Cluster of Excellence "The Politics of Inequality. Perceptions, Participation and Policies".
    • Handle: RePEc:zbw:cexwps:300230
    DOI: 10.48787/kops/352-2-pkkgn822nr6u9
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    More about this item

    Keywords

    automation; organized labor; work councils; labor market tightness; worker re-training;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • 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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