Automation and sectoral reallocation

Abstract

Empirical evidence in Dauth et al. (J Eur Econ Assoc, 2021) suggests that industrial robot adoption in Germany has led to a sectoral reallocation of employment from manufacturing to services, leaving total employment unaffected. We rationalize this evidence through the lens of a general equilibrium model with two sectors, matching frictions and endogenous participation. Automation induces firms to create fewer vacancies and job seekers to search less in the automatable sector (manufacturing). The service sector expands due to the sectoral complementarity in the production of the final good and a positive wealth effect for the household. Analysis across steady states shows that the reduction in manufacturing employment can be offset by the increase in service employment. The model can also replicate the magnitude of the decline in the ratio of manufacturing employment to service employment in Germany between 1994 and 2014.

Does Industrial Intelligence Promote Sustainable Employment?

“…Overall, the results are consistent with some research findings [16,17,45], and industrial intelligence has promoted sustainable employment development. But there are differences with the research conclusions of some scholars [12,26,27,44]; this may be due to differences caused by factors such as research subjects, data selection, and variable measurement.…”

“…In addition to the employment skill structure, the industrial intelligence will mainly reshape the employment industrial structure because industrial intelligence mainly damages manufacturing employment, and these losses will be offset by the increase in service industry employment [44,45]. On the one hand, the replaced manufacturing labor force will transfer to the service industry, leading to cross-departmental redistribution of labor.…”

Can digital economy improve employment structure?—Mediating effect based on a spatial Durbin model

“…Ballestar (2020) demonstrated the complementary relationship between employment and the development of digital economy, even highlighting recent improvements in the employment structure [ 9 ]. Dennis (2021) noted that digital economy has prompted firms to reduce vacancies, which has forced job seekers to attenuate their search for jobs in the automated sector [ 10 ]. However, the decline in manufacturing employment can be compensated by an increase in service employment.…”