Robots, Tasks, and Trade

Erhan Artuc, Paulo Bastos and Bob Rijkers

No 2020/0118, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: This paper examines the effects of robotization on trade patterns, wages and welfare. It developsa Ricardian model with two-stage production and trade in intermediate and final goods in which robots can take over some tasks previously performed by humans in a subset of industries. An increase in robot adoption in the North reduces the cost of production and thereby impacts trade in final and intermediate goods with the South. The empirical analysis uses ordinary least squaresand instrumental-variable regressions exploiting variation in exposure to robots across countriesand sectors. Both reveal that greater robot intensity in own production leads to: (i) a rise inimports sourced from less developed countries in the same industry; and (ii) an even stronger increase in exports to those countries. Counterfactual simulations indicate that Northern roboti-zation raises domestic welfare, but initially depresses wages. However, this adverse effect is likely to be reversed by further reductions in robot prices. Northern robotization may lead to higherwages and welfare in the South.

Keywords: Automation; robots; tasks; jobs; wages; trade; intermediate inputs; global valuechains; gains from trade (search for similar items in EconPapers)
JEL-codes: F1 J23 J24 O3 O4 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-int, nep-lma and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Robots, tasks, and trade (2023)
Working Paper: Robots, Tasks, and Trade (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp01182020

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