Working Paper: NBER ID: w25438
Authors: George J. Borjas; Richard B. Freeman
Abstract: Increased use of robots has roused concern about how robots and other new technologies change the world of work. Using numbers of robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment and wages in an industry by roughly as much as an additional 2 to 3 workers and by 3 to 4 workers in particular groups, which far exceed estimated effects of an additional immigrant on employment and wages. While the growth of robots in the 1996-2016 period of our data was too modest to be a major determinant of wages and employment, the estimated coefficients suggest that continued exponential growth of robots could disrupt job markets in the foreseeable future and thus merit attention from labor analysts.
Keywords: robots; immigration; labor market; employment; wages
JEL Codes: J20; J61; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| influx of industrial robots (L63) | fall in employment (J63) |
| influx of industrial robots (L63) | fall in earnings (E25) |
| entry of an additional robot (C69) | reduction in employment (J63) |
| entry of an additional robot (C69) | reduction in wages (J31) |
| growth of robots from 1996 to 2016 (L63) | potential disruptions in job markets (F66) |
| negative impact of robots on wages (F66) | larger than that of immigrants (J69) |