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Automation and labor force participation in advanced economies: Macro and micro evidence

Francesco Grigoli (), Zsoka Koczan and Petia Topalova

European Economic Review, 2020, vol. 126, issue C

Abstract: Technological advances raise productivity and growth, but are also likely to reshape labor markets. We examine the impact of automation on aggregate labor force participation rates and individuals’ attachment to the workforce in advanced economies. Cross-country analysis, which leverages the variation in the routinizability of occupations and occupational composition, points to significant negative effects of automation on the participation rates of prime-age men and women. Individual-level analysis confirms that workers previously employed in routinizable occupations are more likely to drop out of the labor force. Encouragingly, higher spending on active labor market programs and education are, however, associated with smaller negative effects of technological change on participation.

Keywords: Labor force participation; Technology; Automation; Routinization (search for similar items in EconPapers)
JEL-codes: J11 J21 O33 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.euroecorev.2020.103443

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