Job automation risk, economic structure and trade: a European perspective
Neil Foster-McGregor, Önder Nomaler & Bart Verspagen
#2019-011
Recent studies report that technological developments in machine
learning and artificial intelligence present a significant risk to jobs
in advanced countries. We re-estimate automation risk at the job level,
finding sectoral employment structure to be key in determining
automation risk at the country level. At the country level, we find a
negative relationship between automation risk and labour productivity.
We then analyse the role of trade as a factor leading to structural
changes and consider the effect of trade on aggregate automation risk by
comparing automation risk between a hypothetical autarky and the actual
situation. Results indicate that trade increases automation risk in
Europe, although moderately so. European countries with high labour
productivity see automation risk increase due to trade, with trade
between European and non-European nations driving these results. This
implies that the high productivity countries do not, on the balance,
offshore automation risk, but rather import it.
JEL Classification: F16, F66, O33, J24
Keywords: Automation risk for employment, Industry 4.0, Globalisation,
Global Value Chains