Automating labor: evidence from firm-level patent data
Morten Olsen and
CEP Discussion Papers from Centre for Economic Performance, LSE
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)
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)
Working Paper: Automating labor: evidence from firm-level patent data (2020)
Working Paper: Automating Labor: Evidence from Firm-level Patent Data (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
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 ().