From Immigrants to Robots: The Changing Locus of Substitutes for Workers

Produced by: 
National Bureau of Economic Research
Available from: 
January 2019
Paper author(s): 
George J. Borjas
Richard B. Freeman
Topic: 
Labor
Year: 
2019

Increased use of robots has roused concern about how robots and other new technologies change the world of work. Using numbers of robots shipped to primarily manufacturing industries as a supply shock to an industry labor market, we estimate that an additional robot reduces employment and wages in an industry by roughly as much as an additional 2 to 3 workers and by 3 to 4 workers in particular groups, which far exceed estimated effects of an additional immigrant on employment and wages. While the growth of robots in the 1996-2016 period of our data was too modest to be a major determinant of wages and employment, the estimated coefficients suggest that continued exponential growth of robots could disrupt job markets in the foreseeable future and thus merit attention from labor analysts.

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