Cover of EconPol Working Paper 58

Robots at Work? Pitfalls of Industry Level Data

Karim Bekhtiar, Benjamin Bittschi, Richard Sellner (EconPol Europe, Institute for Advanced Studies [IHS], Vienna)

An analysis of data from the International Federation of Robotics (IFR), currently the most widely used data on the economic effects of robotization, has found that robotization has significantly lower productivity effects than previously assumed and may cause falling wages. Authors Karim Bekhtiar, Benjamin Bittschi and Richard Sellner (EconPol Europe, IHS Vienna) claim that using the data can be misleading if information on sectors that are either unaffected by or only marginally exposed to robotization is combined with those which are heavily affected, such as manufacturing.The study also rejects previous research findings that the technology causes skill-biased technological change and instead finds the opposite to be true.

Abstract

In a seminal paper Graetz and Michaels (2018) find that robots increase labor productivity and TFP, lower output prices and adversely aect the employment share of low-skilled labor. We show that these effects hold only, when comparing hardly-robotizing with highly-robotizing sectors and collapse, when only the latter are analyzed. Controlling for demographic workforce variables reestablishes the productivity effects, but still rejects positive wage effects and skill-biased technological change. Additionally, we find no effects, when the investigation period is extended to the most recent data (2008-2015) and document non-monotonicity in one of the instruments, which calls the respective results into question.

Citation

Karim Bekhtiar, Benjamin Bittschi, Richard Sellner: "Robots at Work? Pitfalls of Industry Level Data" EconPol Working Paper 58, February 2021