Robotisation, employment and income: the role of firms’ size in the Euro area regions

Fabiano Compagnucci (), Mauro Gallegati, Andrea Gentili and Enzo Valentini
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Fabiano Compagnucci: Gran Sasso Science Institute
Mauro Gallegati: Università Politecnica delle Marche
Andrea Gentili: Università Mercatorum
Enzo Valentini: Università di Macerata

No 2025-07, Discussion Paper series in Regional Science & Economic Geography from Gran Sasso Science Institute, Social Sciences

Abstract: This paper investigates the relationship between robotisation—understood as a key driver of innovation—and its impact on employment and household income, with a particular emphasis on the role of firm size at the industry level across regions in the Euro area. In the microeconomic literature, larger firms are generally viewed as more likely to adopt robotisation and more vulnerable to labour saving effects than smaller firms. However, the spatial dimension of this relationship remains underexplored. To address this gap, we calculate the Adjusted Penetration of Robots at the sectoral level by integrating data from the International Federation of Robotics on robot stocks, the EUROSTAT Regional Database, and the Structural Analysis (STAN) database, covering 150 NUTS 2 regions in the Euro area. We then perform a spatial stacked panel analysis incorporating various firm size metrics. Our findings challenge prevailing microeconomic insights. At the regional level, areas with a high prevalence of small firms show a negative correlation between robotisation and household income and employment. In contrast, in regions dominated by non-small firms, robotisation positively correlates with employment but does not result in corresponding increases in household income. These findings indicate that the regional impacts of robotisation may diverge substantially from the aggregated performance of individual firms, as highlighted in the microeconomic literature.

Keywords: Robotisation; Employment; Households’ Income; Firms’ size; Regional Divergence (search for similar items in EconPapers)
JEL-codes: D02 J24 O33 R23 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2025-02, Revised 2025-02
New Economics Papers: this item is included in nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:ahy:wpaper:wp69

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