Robots and Non-participation in the US: Where Have All the Workers Gone?

101 Pages Posted: 10 Aug 2020 Last revised: 13 Sep 2021

See all articles by Benjamin Lerch

Benjamin Lerch

University of Lugano - Faculty of Economics

Date Written: July 14, 2020

Abstract

This paper analyzes the impact of one of the leading automation technologies of the last decades, industrial robots, on the declining labor force participation in the US. Exploiting exogenous variation in the adoption of robots across local labor markets and over time, I find that, on average, one additional robot drives two workers out of the labor force. Despite the adverse impact of robots, there is no evidence that displaced workers are migrating away from exposed labor markets or that labor force dropouts have been compensated by the labor force participation of a family member. Instead, I find that robot adoption leads to rising enrollment in post-secondary education institutions among young individuals, early retirement of older workers and a considerable fraction of middle-aged workers enrolling in disability insurance.

Keywords: industrial robots, labor force participation, education, disability, early retirement

JEL Classification: I12, I26, J21, J26

Suggested Citation

Lerch, Benjamin, Robots and Non-participation in the US: Where Have All the Workers Gone? (July 14, 2020). Available at SSRN: https://ssrn.com/abstract=3650905 or http://dx.doi.org/10.2139/ssrn.3650905

Benjamin Lerch (Contact Author)

University of Lugano - Faculty of Economics ( email )

Via Giuseppe Buffi 13
CH-6900 Lugano, CH-6904
Switzerland

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