Labor Supply and Automation Innovation

Alexander Danzer, Carsten Feuerbaum and Fabian Gaessler

No 8410, CESifo Working Paper Series from CESifo

Abstract: While economic theory suggests substitutability between labor and capital, little evidence exists regarding the causal effect of labor supply on inventing labor-saving technologies. We analyze the impact of exogenous changes in regional labor supply on automation innovation by exploiting an immigrant placement policy in Germany during the 1990s and 2000s. Difference-in-differences estimates indicate that one additional worker per 1,000 manual and unskilled workers reduces automation innovation by 0.05 patents. The effect is most pronounced two years after immigration and confined to industries containing many low-skilled workers. Labor market tightness and external demand are plausible mechanisms for the labor-innovation nexus.

Keywords: labor supply; automation; innovation; patents; labor market tightness; quasi-experiment (search for similar items in EconPapers)
JEL-codes: J61 O31 O33 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Labor Supply and Automation Innovation (2020)
Working Paper: Labor Supply and Automation Innovation (2020)
Working Paper: Labor Supply and Automation Innovation (2020)
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