U.S. Robots and Their Impacts in the Tropics: Evidence from Colombian Labor Markets

47 Pages Posted: 2 Nov 2020 Last revised: 6 Feb 2022

See all articles by Adriana D. Kugler

Adriana D. Kugler

McCourt School of Public Policy ; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Maurice Kugler

IMPAQ International LLC

Laura Ripani

Inter-American Development Bank (IDB)

Rodimiro Rodrigo

Georgetown University

Date Written: October 2020

Abstract

Previous studies for developed countries show negative short-run impacts of automation on employment and earnings. In this paper, we instead examine whether automation by a key trading partner can hurt workers in a developing country. We specifically focus in Colombia’s labor market, and how the automation in the U.S. impacts Colombian workers by replacing exports from Colombia for cheaper robot-made U.S. products. We use employer-employee matched data from the Colombian social security records combined with data on U.S. exposure to robots in different sectors from 2011 to 2016 to examine if robots in the U.S. are displacing workers in Colombia. We find that U.S. robots decrease employment and earnings for Colombian workers in those sectors of local labor markets that have high levels of automation -measured as robots per thousand workers- in the U.S. labor market. In terms of turnover, as expected, there is an increase in dismissals and a decrease in hires for workers in sectors highly impacted by robots in the U.S. Moreover, the negative displacement effects of robots are greater for women; older workers; workers employed in small and medium sized enterprises, and workers employed in manufacturing. Importantly, local labor markets which exported the most to the U.S. in the past, are also the most affected by the increased adoption of U.S. robots, suggesting that Colombian workers may be losing employment to automated jobs reshored back to the U.S. Our estimates suggest that during our period of analysis, the adoption of robots in the U.S. led to a cumulative loss of between 63,000 and 100,000 jobs in Colombia.

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Suggested Citation

Kugler, Adriana Debora and Kugler, Maurice and Ripani, Laura and Rodrigo, Rodimiro, U.S. Robots and Their Impacts in the Tropics: Evidence from Colombian Labor Markets (October 2020). NBER Working Paper No. w28034, Available at SSRN: https://ssrn.com/abstract=3723271

Adriana Debora Kugler (Contact Author)

McCourt School of Public Policy ( email )

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Washington, DC 20057
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics ( email )

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Bonn, D-53072
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National Bureau of Economic Research (NBER) ( email )

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Maurice Kugler

IMPAQ International LLC ( email )

1325 G Street, NW
Suite 900
Washington, DC 20005
United States

Laura Ripani

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Rodimiro Rodrigo

Georgetown University

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