Threats and opportunities in the digital era: The firm-level effects of automation on employment, wages and export performance

Tania Treibich, Maastricht University

The paper examines the impact of automation on the organization and production of the firm in the French context.

Resorting to an integrated dataset encompassing detailed information on firms, their imports, and employer-employee data for French manufacturing employers over the period 2002–2017, we identify ‘automation spikes’ using imports of capital goods embedding automation technologies. We first investigate the changes in worker flows (i.e. net growth, but also hiring and separation rates) around investment in automation-intensive goods and, within firms, across occupational categories. Even after controlling for firms’ non-random selection into automation, we find that automation spikes are linked to an increase in firms’ contemporaneous net employment growth rate, jointly explained by a higher hiring rate and a lower separation rate.

As a second step, we look into the impact of such automation spikes on within-firm wage inequality. We document that most wage inequality in France is accounted for by differences among workers belonging to the same firm rather than by differences between sectors, firms, and occupations. Using an event-study approach on a sample of firms importing automation- and AI-related goods, we find that spike events related to the adoption of automation- and AI-related capital goods are not followed by an increase in within-firm wage inequality or in gender wage inequality. This adds to previous findings presenting a picture of a ‘labor friendly’ effect of the latest wave of new technologies within adopting firms.

Finally, we explore how automation adoption relates to changes in firms’ capabilities as revealed by their export portfolio.

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About the speaker

Tania is an Associate Professor at Maastricht University working in the area of Macro, International & Labour Economics. Her main research interest lies in the interaction between firm behavior (industry dynamics, trade) and macroeconomic outcomes and policy.

Venue: 0.18, UNU-MERIT, Boschstraat 24, 6211 AX Maastricht

Date: 06 December 2022

Time: 12:30 - 13:30  CEST