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Labor Supply and Automation Innovation

Alexander Danzer (), Carsten Feuerbaum () and Fabian Gaessler ()
Additional contact information
Carsten Feuerbaum: KU Eichstaett-Ingolstadt , Max Planck Institute
Fabian Gaessler: Max Planck Institute

No 2014, CReAM Discussion Paper Series from Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London

Abstract: While economic theory suggests substitutability between labor and capital, little evidence exists regarding the causal effect of labor supply on inventing labor-saving technologies. We analyze the impact of exogenous changes in regional labor supply on automation innovation by exploiting an immigrant placement policy in Germany during the 1990s and 2000s. Difference-in-differences estimates indicate that one additional worker per 1,000 manual and unskilled workers reduces automation innovation by 0.05 patents. The effect is most pronounced two years after immigration and confined to industries containing many low-skilled workers. Labor market tightness and external demand are plausible mechanisms for the labor-innovation nexus.

Keywords: Labor supply; automation; innovation; patents; labor market tightness; quasi-experiment (search for similar items in EconPapers)
JEL-codes: J61 O31 O33 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-eur, nep-ino, nep-ltv, nep-tid and nep-ure
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Related works:
Working Paper: Labor Supply and Automation Innovation (2020) Downloads
Working Paper: Labor Supply and Automation Innovation (2020) Downloads
Working Paper: Labor Supply and Automation Innovation (2020) Downloads
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