Robot adoption and employment adjustment: Firm-level evidence from China

Ting Wang, Yi Zhang and Chun Liu

China Economic Review, 2024, vol. 84, issue C

Abstract: This paper investigates the impact of robot adoption on employment adjustment at the firm level in China. By employing an instrumental variable that exploits the source of variation in robot adoption across firms, our analysis reveals that the utilization of industrial robots leads to an increase in employment within firms, particularly with regard to highly educated and skilled personnel. Furthermore, an exploration of the underlying mechanisms demonstrates that this positive employment effect is primarily attributed to the productivity effect of robot adoption, resulting in increased productivity and heightened labor demand. However, there is limited empirical support for the negative displacement effect wherein robots replace workers. Additionally, our investigation uncovers evidence of technology-driven intra-industry labor reallocation to robot-adopting firms from their non-adopting counterparts.

Keywords: Robot adoption; Employment adjustment; Firm productivity; China (search for similar items in EconPapers)
JEL-codes: D22 D24 J21 J24 O33 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:84:y:2024:i:c:s1043951x24000269

DOI: 10.1016/j.chieco.2024.102137

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