Induced automation: Evidence from firm-level patent data

Arbeitspapier

Do higher wages lead to more automation innovation? To answer this question, we first use the frequency of certain keywords in patent text to create a new measure of automation innovation in machinery. We show that our measure is correlated with a reduction in routine tasks in a cross-sectoral analysis in the US. We combine macroeconomic data from 41 countries and information on geographical patent history to build firm-specific measures of low- and high-skill wages. In a firm-level panel analysis, we find that an increase in low-skill wages leads to more automation innovation with an elasticity between 2 and 5. Placebo regressions show that the effect is specific to automation innovations. Finally, we focus on a specific labor market shock, the German Hartz reforms, and show that they reduced automation innovations by those non-German firms relatively more exposed to Germany.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 384

Classification and Topics

• Classification: Wirtschaft ; Innovation and Invention: Processes and Incentives ; Technological Change: Choices and Consequences; Diffusion Processes ; Demand and Supply of Labor: General
• Subject: Automation ; innovation ; patents ; income inequality

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dechezleprêtre, Antoine ; Hémous, David ; Olsen, Morten ; Zanella, Carlo
• Event: Veröffentlichung
• (who): University of Zurich, Department of Economics
• (where): Zurich
• (when): 2021

Further information

• DOI: doi:10.5167/uzh-202850
• Handle: http://hdl.handle.net/10419/234025
• Last update: 10.03.2025, 11:43 AM CET