Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315741 
Year of Publication: 
2025
Series/Report no.: 
ZEW Discussion Papers No. 25-005
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
New technologies drive productivity growth, yet the distribution of gains may be unequal. We study how labor market institutions - specifically shop-floor worker representation - mediate the impact of automation. Combining German individual-level administrative records with plant-level data on industrial robot adoption, we find that works councils reduce the separation risk for incumbent workers during automation events. When labor markets are tight and replacement costs are high, incumbent workers become more valuable from the firm's perspective. Consequently, we document that the moderating effects of works councils diminish. Older workers, who face greater challenges reallocating to new employers, benefit the most from organized labor in terms of wages and employment. Finally, we observe that works councils do not hinder robot adoption; rather, they spur the use of higher-quality robots, encourage more worker training during robot adoption, and foster higher productivity growth thereafter.
Subjects: 
automation
organized labor
work councils
labor market tightness,worker re-training
JEL: 
J20
J30
J53
O33
Document Type: 
Working Paper

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