The robots are coming to give you jobs

Or at least, they're coming to give you jobs in Spain according to this study. Whether this is true everywhere or if this data is accurate I know not.

Figure 1, constructed from the ESEE dataset, provides a clear indication that firm heterogeneity in the adoption of robots matters greatly for the labour market effects of robot technology. It demonstrates that firms that adopted robots between 1990 and 1998 (‘robot adopters’) increased the number of jobs by more than 50% between 1998 and 2016, while firms that did not adopt robots (‘non-adopters’) reduced the number of jobs by more than 20% over the same period. From macro-level information on robot use, as employed in the existing literature, it is impossible to identify and investigate this striking pattern in the data.

We reveal strong evidence for positive selection, that is, we show that firms that adopt robots in their production process are already larger and more productive than non-adopters before adopting robots. Looking at firms’ internal skill composition of labour, we establish robust evidence that, conditional on productivity, more skill-intensive firms are less likely to adopt robots. Intuitively, a more complex production process requires a larger share of high-skilled workers; since these workers are more difficult to replace, there is a negative relationship between the skill intensity of the firm and the gains from automation. Finally, our data show that exporters are more likely to adopt robots than non-exporters, since the gains from doing so can be scaled up to a larger customer base.

What this desperately needs is - unusually - an anecdote. Let's say their numbers are fine. What does this look like on the ground ? Does greater automation mean that new jobs are created (e.g. "to build and maintain those robots !") or that greater production power now needs more staff to do existing jobs that robots currently can't do ?

I'm very much on the fence regarding the predictions that automation will soon render huge numbers of people redundant. On the one hand, I do not believe that everyone can do every job, so replacing menial work could plausibly leave large numbers of people with nothing to do. On the other, not every manual job can yet be done by robots. So robots replacing humans in a limited set of tasks then requires more people to do the remaining manual labour, hence creating more jobs so long as those cannot be automated. That implies there is an end point, a threshold beyond which automation will indeed cause job losses rather than gains... but that, conceivably, is a very long way off indeed.

Robots and firms

The rise of robots has sparked an intense debate about the labour market effects of their adoption. This column explores differences in robot adoption across firms and analyses the labour market effects of robot adoption at the firm level.