Robots and Human Labor: Dynamics, Intergenerational Impacts and Inequality

Abstract

In today's world, where the use of robots in production processes is increasing, future predictions about human labor constitute an important research subject. In this dissertation, the implications of rising robots on labor markets are observed. For this purpose the effect of robots on human labor is investigated through theoretical and empirical estimation methods. The first chapter illustrates a two-period overlapping generations framework, including robots, human labor and physical capital in the production process. Our model is consistent with labor-saving or labor-replacing impact of robotics and the OLG dynamics indicatea negative impact of robots on employment. Chapter 2 addresses the empirical investigation of the robotic impact on employment. We use novel panel datafor 47 countries over the period 2004-2016 to test the employment impact of robot-usage. Our SYS-GMM estimates show that each additional robot usage leads a 0.7 percent drop in employment for selected countries. The magnitude of employment impact of robots becomeshigher in high-income countries that each robot increase causes 3.1 percent drop in employment rate. The impact of robots on heterogeneous labor market is investigated in chapter 3. Heterogeneity is observed among four different age groups and gender classifications.Regarding the analyses based on age groups, dynamic panel data estimation provides empirical evidence that most negatively affected group is young people under the age of 25. In addition, while the least negatively affected group is the oldest group, the middle age group is found to be positively affected. Regarding to age group classification, results support the skill-biased technological change (SBTC) hypothesis in which different skill groups diverge against robotic impacts. The results also indicate that robots are more unfavorable to men workers. This situation is explained conceptually withtask-biased technological change(TBTC), as a result of the fact that male employees are quantitatively more involved in routine jobs than women.