Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282124 
Year of Publication: 
2023
Series/Report no.: 
Discussion Paper No. 432
Publisher: 
Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition, München und Berlin
Abstract: 
We examine the impact of labor market power on firms' adoption of automation technologies. We develop a model that incorporates labor market power into the task-based theory of automation. We show that, due to higher marginal cost of labor, monopsonistic firms have stronger incentives to automate than wage-taking firms, which could amplify or mitigate the negative employment effects of automation. Using data from US commuting zones, our results show that commuting zones that are more exposed to industrial robots exhibit considerably larger reductions in both employment and wages when their labor markets demonstrate higher levels of concentration.
Subjects: 
automation
employment
labor market concentration
industrial robots
wage setting
JEL: 
J23
J30
J42
L11
O33
Document Type: 
Working Paper

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