Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/286557 
Year of Publication: 
2022
Citation: 
[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Volume:] 13 [Issue:] 1 [Year:] 2022 [Pages:] 335-362
Publisher: 
Springer, Heidelberg
Abstract: 
Empirical evidence in Dauth et al. (J Eur Econ Assoc, 2021) suggests that industrial robot adoption in Germany has led to a sectoral reallocation of employment from manufacturing to services, leaving total employment unaffected. We rationalize this evidence through the lens of a general equilibrium model with two sectors, matching frictions and endogenous participation. Automation induces firms to create fewer vacancies and job seekers to search less in the automatable sector (manufacturing). The service sector expands due to the sectoral complementarity in the production of the final good and a positive wealth effect for the household. Analysis across steady states shows that the reduction in manufacturing employment can be offset by the increase in service employment. The model can also replicate the magnitude of the decline in the ratio of manufacturing employment to service employment in Germany between 1994 and 2014.
Subjects: 
Automation
Manufacturing
Matching frictions
Participation
Productivity
Sectoral reallocation
Services
Vacancy creation
JEL: 
E24
J22
J23
O14
O33
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article

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