Automation and Low-skill Labor
Title: Automation and Low-Skill Labor (co-author Katja Mann (CBS))
Abstract: An increase in the supply of low-skill workers potentially affects robot adoption at the firm-level by alleviating labor shortages. We assess this claim by exploiting an exogenous change in the labor supply induced by a large influx of immigrants into Danish municipalities. Using the Danish employer-employee matched dataset over the period 1995-2019, we show in a shift-share regression that a larger share of migrants in a municipality leads to fewer imports of robots at the firm-level. We rationalize this finding in a simple model of robot adoption in which robots and low-skill workers are substitutes.