Robot Adoption, Worker-Firm Sorting and Wage Inequality: Evidence from Administrative Panel Data

Ester Faia, Gianmarco Ottaviano and Saverio Spinella

No 17451, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Leveraging the geographic dimension of a large administrative panel on employer- employee contracts, we study the impact of robot adoption on wage inequality through changes in worker-firm assortativity. Using recently developed methods to correctly and robustly estimate worker and firm unobserved characteristics, we find that robot adoption increases wage inequality by fostering both horizontal and vertical task specialization across firms. In local economies where robot penetration has been more pronounced, workers performing similar tasks have disproportionately clustered in the same firms (‘segregation’). Moreover, such clustering has been characterized by the concentration of higher earners performing more complex tasks in firms paying higher wages (‘sorting’). These firms are more productive and poach more aggressively. We rationalize these findings through a simple extension of a well-established class of models with two-sided heterogeneity, on-the-job search, rent sharing and employee Bertrand poaching. We conclude that our empirical findings reveal the presence of both ‘routine-biased technological change’ (RBTC), whereby new technology decreases the relative demand for workers in traditional routine tasks, and ‘core-biased technological change’ (CBTC), whereby new technology requires workers with specialized knowledge independently of their tasks being more or less routine intensive.

JEL-codes: D31 E21 J22 J23 J31 J62 (search for similar items in EconPapers)
Date: 2022-07
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP17451 (application/pdf)

Related works:
Working Paper: Robot adoption, worker-firm sorting and wage inequality: evidence from administrative panel data (2023)
Working Paper: Robot adoption, worker-firm sorting and wage inequality: evidence from administrative panel data (2023)
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:cpr:ceprdp:17451

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP17451

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().