Automation Trends and Labor Markets

Irene Brambilla, Andrés César, Guillermo Falcone, and Leonardo Gasparini

Economic Development and Cultural Change, 2026, vol. 75, issue 1, 401 - 430

Abstract: We study the effects of automation of production on labor market outcomes and whether there is an effect of automation on functional and personal inequality in seven Latin American countries—Argentina, Brazil, Chile, Colombia, Ecuador, Mexico, and Peru—during the period 1992–2015. The identification strategy exploits the exposure to automation across occupations and the acceleration of adoption of automation technology across time to construct a difference-in-differences estimator. Industry-level estimates suggest that while automation reduces employment in industries with a higher share of workers performing routine tasks, the labor share remains unchanged, as wages of workers that remain employed weakly go up. Consistently, findings at the local labor market level suggest that unemployment increases in districts with a greater fraction of workers performing routine tasks and that the average wage increases. At the same time, informality rises among semiskilled workers, indicating that part of the adjustment takes place through movements into less protected jobs. These districts also exhibit a relative increment in poverty and personal income inequality, as unemployment increases more rapidly among unskilled workers.

Date: 2026
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