Robots and the Gender Pay Gap in Europe

48 Pages Posted: 21 Jul 2020

See all articles by Cevat Giray Aksoy

Cevat Giray Aksoy

European Bank for Reconstruction and Development; King’s College London; IZA Institute of Labor Economics

Berkay Özcan

London School of Economics & Political Science (LSE)

Julia Philipp

London School of Economics & Political Science (LSE) - London School of Economics

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Date Written: July 15, 2020

Abstract

Could robotization make the gender pay gap worse? We provide the first large-scale evidence on the impact of industrial robots on the gender pay gap using data from 20 European countries. We show that robot adoption increases both male and female earnings but also increases the gender pay gap. Using an instrumental variable strategy, we find that a ten percent increase in robotization leads to a 1.8 percent increase in the gender pay gap. These results are mainly driven by countries with high levels of gender inequality and outsourcing destination countries. We then explore the mechanisms behind this effect and find that our results can be explained by the fact that men at medium- and high-skill occupations disproportionately benefit from robotization (through a productivity effect). We rule out the possibility that our results are driven by mechanical changes in the gender composition of the workforce nor by inflows or outflows from the manufacturing sector.

Keywords: industrial robots, gender pay gap, automation, Europe

JEL Classification: J00, J31, J71

Suggested Citation

Aksoy, Cevat Giray and Özcan, Berkay and Philipp, Julia, Robots and the Gender Pay Gap in Europe (July 15, 2020). EBRD Working Paper No. 246, Available at SSRN: https://ssrn.com/abstract=3652165 or http://dx.doi.org/10.2139/ssrn.3652165

Cevat Giray Aksoy (Contact Author)

European Bank for Reconstruction and Development ( email )

One Exchange Square
London EC2A 2JN
United Kingdom

King’s College London ( email )

Aldwych
London, WC2A 2AE
United Kingdom

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Berkay Özcan

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

Julia Philipp

London School of Economics & Political Science (LSE) - London School of Economics

United Kingdom

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