Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223871
Authors: 
Danzer, Alexander M.
Feuerbaum, Carsten
Gaessler, Fabian
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13429
Abstract: 
While economic theory suggests substitutability between labor and capital, little evidence exists regarding the causal effect of labor supply on inventing labor-saving technologies. We analyze the impact of exogenous changes in regional labor supply on automation innovation by exploiting an immigrant placement policy in Germany during the 1990s and 2000s. Difference-in-differences estimates indicate that one additional worker per 1,000 manual and unskilled workers reduces automation innovation by 0.05 patents. The effect is most pronounced two years after immigration and confined to industries containing many low-skilled workers. Labor market tightness and external demand are plausible mechanisms for the labor-innovation nexus.
Subjects: 
labor supply
automation
innovation
patents
labor market tightness
quasiexperiment
JEL: 
O31
O33
J61
Document Type: 
Working Paper

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