Advanced Technologies and Worker Voice

Abstract

The interplay between labor institutions and firm-level adoption of new technologies such as robotics and other advanced digital tools remains poorly understood. Using a cross-sectional sample of more than 20000 European establishments, this paper documents a positive association between shop-floor employee representation (ER) and the utilization of these emerging technologies. We dig into the mechanisms driving this correlation by exploiting rich information on the role played by ER in relation to well-defined decision areas of management, such as work organization, dismissals, training and working time. In addition, we conduct a quantitative case study using a panel of Italian firms and exploiting size-contingent policy rules governing the operation of ER bodies in the context of a local-randomization regression discontinuity design. The analysis suggests a positive effect of ER on investments in advanced technologies around the firm size cutoff, although the results are sensitive to the type of technology and specification choices. We also document positive effects on training and process innovation and no evidence of changes in the composition of employment. Altogether, our findings cast doubts on the idea that ER discourages technology adoption. Rather, ER seems to influence workplace practices that enhance the complementary between labor and new advanced technologies.

Keywords: Automation, Robots, Digitalization, Unions, Employee Representation, Labor Market Institutions

JEL Classification: J50, O32, O33