EconPapers    
Economics at your fingertips  
 

Automating labor: evidence from firm-level patent data

Antoine Dechezleprêtre, David Hemous, Morten Olsen and Carlo Zanella

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: Do higher wages lead to more automation innovation? To answer this question, we first introduce a new measure of automation by using the frequency of certain keywords in patent text to identify automation innovations in machinery. We validate our measure by showing that it is correlated with a reduction in routine tasks in a cross-sectoral analysis in the US. Then we build a firm-level panel dataset on automation patents. We combine macroeconomic data from 41 countries and information on geographical patent history to build firm-specific measures of lowskill and high-skill wages. We find that an increase in low-skill wages leads to more automation innovation with an elasticity between 2 and 4. An increase in highskill wages tends to reduce automation innovation. Placebo regressions show that the effect is specific to automation innovations. Finally, we use the Hartz labor market reforms in Germany for an event study and find that they are associated with a relative reduction in automation innovations.

Keywords: automation; innovation; patents; income inequality (search for similar items in EconPapers)
JEL-codes: J20 O31 O33 (search for similar items in EconPapers)
Date: 2020-02
New Economics Papers: this item is included in nep-ipr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://cep.lse.ac.uk/pubs/download/dp1679.pdf (application/pdf)

Related works:
Working Paper: Automating labor: evidence from firm-level patent data (2020) Downloads
Working Paper: Automating Labor: Evidence from Firm-level Patent Data (2019) Downloads
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:cep:cepdps:dp1679.pdf

Access Statistics for this paper

More papers in CEP Discussion Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().

 
Page updated 2021-10-14
Handle: RePEc:cep:cepdps:dp1679.pdf