Who is Replaced by Robots? Robotization and the Risk of Unemployment for Different Types of Workers

Abstract

We study the effects of robotization on unemployment risk for different types of workers. We examine the extent to which robotization increases inequality at the skill level and at the occupational level using two theoretical frameworks: skill-biased technological change and task-biased technological change. Empirically, we combine worker-level data with information on actual investments in industrial robots. Zooming in on the German manufacturing industry, our multivariate results show that robotization affects different types of workers differently. We do not observe an increase in unemployment risk for low- and medium-skilled, but we find a considerably lower unemployment risk among high-skilled workers. Moreover, the unemployment risk is significantly higher in occupations with highly substitutable tasks, but only in industries that invest largely in robots.