How Robots Change Within-Firm Wage Inequality

Abstract

Using novel matched employer-employee register data with firm-level information on the introduction of industrial robots, this paper analysis the impact of robots on the wages of workers in the manufacturing sector. The results show that industrial robots increase wages for high-skilled workers relative to low-skilled workers, hence robots increases the skill-premium within firms. Furthermore, we find that employees in managerial positions benefit more from robotisation than those in STEM or professional occupations. Overall, our results suggest that the introduction of industrial robots has a positive effect on the average wages of manufacturing workers in Norway.

For whom the bell tolls: The firm-level effects of automation on wage and gender inequality

“…How do these results compare to other estimates from the literature? Precise estimates of the relation between automation and wages can be found in the case of the adoption of industrial robots (Koch et al, 2019;Barth et al, 2020;Humlum, 2020). Koch et al (2019) find no significant effect of robot adoption on the average firm wage in Spain; Barth et al (2020) find a 4% increase in the average log hourly wage in manufacturing firms in Norway, and Humlum (2020) report an 8% increase in the wage bill in the case of Denmark.…”

“…Precise estimates of the relation between automation and wages can be found in the case of the adoption of industrial robots (Koch et al, 2019;Barth et al, 2020;Humlum, 2020). Koch et al (2019) find no significant effect of robot adoption on the average firm wage in Spain; Barth et al (2020) find a 4% increase in the average log hourly wage in manufacturing firms in Norway, and Humlum (2020) report an 8% increase in the wage bill in the case of Denmark. Finally, a modest relationship between hourly wage and robot adoption is observed in in a smaller sample including approximately 600 French robot adopters.…”

“…He identifies that the overall positive effect on wages is driven by the impact on tech workers, while production workers observe a wage loss. In a study of Norwegian firms in the manufacturing sector, Barth et al (2020) find that robots increase wages for high-skilled workers and managerial occupations, thus positively affecting wage inequality. As explained below, we focus on firm (instead of occupation)-level inequality as identified through the wage distribution; in addition, our measure includes but is not confined to robots; hence, it is much broader.…”

Effects of technological change and automation on industry structure and (wage-)inequality: insights from a dynamic task-based model

“…Due to data limitations this is still a small literature, that, however, has already interesting insights to offer. 1 Barth et al (2020) shows that robots have positive effects on average wages, and that wages of high skill workers increase relative to wages of the low skill workers in firms that robotize. Dixon et al (2021) find that investment in robots increases total employment within firms, which, in their sample of Canadian firms, is a composite effect of higher employment of high skill workers and of low skill workers, and lower employment of middle skill workers.…”

Advanced Technologies and Worker Voice

“…22 The rapid diffusion of robots and modern digital technologies has led many authors to investigate the effects of these technologies on labour along different dimensions, such as skill polarization (Acemoglu and Restrepo 2018), wage inequality (Barth et al . 2020) and employment (Acemoglu and Restrepo 2020; Bessen et al . 2019, 2020; Graetz and Michaels 2018; Carbonero et al .…”