Threats and opportunities in the digital era: Automation spikes and employment dynamics

Giacomo Domini, M Grazzi, D Moschella, T Treibich

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Abstract

This paper investigates the change in worker flows (i.e. net growth, but also hiring and separation rates) around an investment in automation-intensive goods and, within firms, across occupational categories. Resorting to an integrated dataset encompassing detailed information on firms, their imports, and employer-employee data for French manufacturing employers over the period 2002–2015, we identify ‘automation spikes’ using imports of capital goods embedding automation technologies. Even after controlling for firms’ non-random selection into automation, we find that automation spikes are linked to an increase in firms’ contemporaneous net employment growth rate, jointly explained by a higher hiring rate and a lower separation rate. Furthermore, we find that automation spikes are not associated with significant changes in the composition of the workforce (in terms of 1-digit and 2-digit occupational categories, and routine-intensive vs. non routine-intensive jobs).

Original languageEnglish
JournalResearch Policy
Volume50
Issue number7
DOIs
Publication statusPublished - Sept 2021

Bibliographical note

Funding Information:
This paper has benefited from comments of participants at several conferences: the 11th European Meeting of Applied Evolutionary Economics (EMAEE, Brighton, June 2019), the Innovation, firm dynamics, employment and growth workshop (Greenwhich University, June 2019), the internal seminar of the Dept. of Economic Policy, Universit? Cattolica, Milano (June 2019), the 2nd Conference on the Geography of Innovation and Complexity, Utrecht (September 2019), the UNIDO and UNU-MERIT conference on The future of industrial work, Vienna (September 2019), the CONCORDi conference on Industrial innovation for transformation, Seville (September 2019), a presentation at the Rotterdam School of Management (November 2019), the Bank of Italy conference on Recent trends in firm organization and firm dynamics, Rome (December 2019), the 5th Online workshop on Industrial Dynamics and Innovation (December 2019), the ASSA 2020 Annual Meeting, San Diego (January 2020), the Paper Development Workshop, Manchester (January 2020), the LISER-IAB conference on The digital transformation and the future of work, Luxembourg (February 2020), the 35th European Economic Association (EEA) Congress (August 2020), and the ESCoE Conference on Economic Measurement (September 2020). We are also indebted to Ariell Reshef, Mariagrazia Squicciarini and Marco Vivarelli for insightful comments. This work has been partly supported by the European Commission under the H2020, GROWINPRO, Grant Agreement 822781 and by the Italian Ministero dell'Istruzione, dell'Universit? e della Ricerca (PRIN-2017, project 201799ZJSN: ?Technological change, industry evolution and employment dynamics?). This work is also supported by a public grant overseen by the French National Research Agency (ANR) as part of the ?Investissements d'avenir? (reference: ANR-10-EQPX-17, Centre d'acc?s s?curis? aux donn?es, CASD). The usual disclaimer applies.

Funding Information:
This paper has benefited from comments of participants at several conferences: the 11th European Meeting of Applied Evolutionary Economics (EMAEE, Brighton, June 2019), the Innovation, firm dynamics, employment and growth workshop (Greenwhich University, June 2019), the internal seminar of the Dept. of Economic Policy, Università Cattolica, Milano (June 2019), the 2nd Conference on the Geography of Innovation and Complexity, Utrecht (September 2019), the UNIDO and UNU-MERIT conference on The future of industrial work, Vienna (September 2019), the CONCORDi conference on Industrial innovation for transformation, Seville (September 2019), a presentation at the Rotterdam School of Management (November 2019), the Bank of Italy conference on Recent trends in firm organization and firm dynamics, Rome (December 2019), the 5th Online workshop on Industrial Dynamics and Innovation (December 2019), the ASSA 2020 Annual Meeting, San Diego (January 2020), the Paper Development Workshop, Manchester (January 2020), the LISER-IAB conference on The digital transformation and the future of work, Luxembourg (February 2020), the 35th European Economic Association (EEA) Congress (August 2020), and the ESCoE Conference on Economic Measurement (September 2020). We are also indebted to Ariell Reshef, Mariagrazia Squicciarini and Marco Vivarelli for insightful comments. This work has been partly supported by the European Commission under the H2020, GROWINPRO, Grant Agreement 822781 and by the Italian Ministero dell'Istruzione, dell'Università e della Ricerca (PRIN-2017, project 201799ZJSN: “Technological change, industry evolution and employment dynamics”). This work is also supported by a public grant overseen by the French National Research Agency (ANR) as part of the ‘Investissements d’avenir’ (reference: ANR-10-EQPX-17, Centre d’accès sécurisé aux données, CASD). The usual disclaimer applies.

Publisher Copyright:
© 2020 Elsevier B.V.

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