Organized labor versus robots? Evidence from microdata

Sebastian Findeisen, Wolfgang Dauth and Oliver Schlenker

No 25-005, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: New technologies drive productivity growth, yet the distribution of gains may be unequal. We study how labor market institutions - specifically shop-floor worker representation - mediate the impact of automation. Combining German individual-level administrative records with plant-level data on industrial robot adoption, we find that works councils reduce the separation risk for incumbent workers during automation events. When labor markets are tight and replacement costs are high, incumbent workers become more valuable from the firm's perspective. Consequently, we document that the moderating effects of works councils diminish. Older workers, who face greater challenges reallocating to new employers, benefit the most from organized labor in terms of wages and employment. Finally, we observe that works councils do not hinder robot adoption; rather, they spur the use of higher-quality robots, encourage more worker training during robot adoption, and foster higher productivity growth thereafter.

Keywords: automation; organized labor; work councils; labor market tightness; worker re-training (search for similar items in EconPapers)
JEL-codes: J20 J30 J53 O33 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-hrm, nep-lma and nep-tid
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https://www.econstor.eu/bitstream/10419/315741/1/1922953156.pdf (application/pdf)

Related works:
Working Paper: Organized Labor Versus Robots? Evidence from Micro Data (2024)
Working Paper: Organized labor versus robots? Evidence from micro data (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:315741

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