Abstract:
The rapid diffusion of industrial robots since the early 1990s has profoundly reshaped labor markets. While automation has generated new job opportunities, it has also displaced a large number of workers and contributed to the long-run decrease in male labor force participation in the United States. In a recent study (Di Giacomo and Lerch 2026), we provide new evidence on how workers exposed to robot adoption adjust their labor force participation decisions and on the pathways of displaced workers after they exit the labor market. In particular, we show that between 1993 and 2014, each additional industrial robot is associated with four workers in the US leaving the labor force. Most displaced workers either retire early or enter disability insurance, while younger workers tend to enroll in college. In Europe, the adverse labor market effects of automation are less pronounced, since employment growth in other occupations and industries partly offsets these losses. However, displaced workers may still exit the labor force due to skills mismatches with newly created jobs. Our findings provide important insights into the labor market consequences of automation and can help inform policies aimed at supporting workers and strengthening labor market resilience in the face of ongoing technological progress.
