From wages to widgets: how minimum wage hikes fuel automation

Shahab Sharfaei and Jakkrit Thavorn ()
Additional contact information
Shahab Sharfaei: Prague University of Economics and Business
Jakkrit Thavorn: Thammasat University

Palgrave Communications, 2025, vol. 12, issue 1, 1-12

Abstract: Abstract This study considers the relationship between the recent technological advancements in robotics and three key economic factors which arguably define labour market well-being: wages, productivity, and labour share. Given these advancements, many forecasts have been made regarding the repercussions of technological adoption for the labour market. However, we rely on empirical evidence to examine these phenomena and project the future trajectory. By developing a theoretical model and using data on robot adoption from six European economies that implemented minimum wage in the 21st century, this study analyses the effects of minimum wage policies on robot adoption and, in turn, the impact of robot adoption on productivity and labour share. Our findings suggest that the implementation of minimum wage policies is associated with an increase in robot installations, which, subsequently results in higher productivity and a greater labour share of income.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41599-025-05039-9 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-05039-9

Ordering information: This journal article can be ordered from
https://www.nature.com/palcomms/about

DOI: 10.1057/s41599-025-05039-9

Access Statistics for this article

More articles in Palgrave Communications from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().