Dechezlepretre, Antoine, Hemous, David, Olsen, Morten and Zanella, Carlo (2020) Automating labor: evidence from firm-level patent data. CEP Discussion Papers (CEPDP1679). London School of Economics and Political Science. Centre for Economic Performance, London, UK.
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Abstract
Do higher wages lead to more automation innovation? To answer this question, we first introduce a new measure of automation by using the frequency of certain keywords in patent text to identify automation innovations in machinery. We validate our measure by showing that it is correlated with a reduction in routine tasks in a cross-sectoral analysis in the US. Then we build a firm-level panel dataset on automation patents. We combine macroeconomic data from 41 countries and information on geographical patent history to build firm-specific measures of lowskill and high-skill wages. We find that an increase in low-skill wages leads to more automation innovation with an elasticity between 2 and 4. An increase in highskill wages tends to reduce automation innovation. Placebo regressions show that the effect is specific to automation innovations. Finally, we use the Hartz labor market reforms in Germany for an event study and find that they are associated with a relative reduction in automation innovations.
Item Type: | Monograph (Discussion Paper) |
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Official URL: | https://cep.lse.ac.uk/_new/publications/discussion... |
Additional Information: | © 2020 The Authors |
Divisions: | Grantham Research Institute |
Subjects: | H Social Sciences > HC Economic History and Conditions |
JEL classification: | O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O31 - Innovation and Invention: Processes and Incentives O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J20 - General |
Date Deposited: | 14 Jan 2021 14:42 |
Last Modified: | 16 May 2024 12:21 |
URI: | http://eprints.lse.ac.uk/id/eprint/108420 |
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