Monopsony and Automation

Arbeitspapier

We examine the impact of labor market power on firms' adoption of automation technologies. We develop a model that incorporates labor market power into the task-based theory of automation. We show that, due to higher marginal cost of labor, monopsonistic firms have stronger incentives to automate than wage-taking firms, which could amplify or mitigate the negative employment effects of automation. Using data from US commuting zones, our results show that commuting zones that are more exposed to industrial robots exhibit considerably larger reductions in both employment and wages when their labor markets demonstrate higher levels of concentration.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 432

Classification and Topics

• Classification: Wirtschaft ; Labor Demand ; Wages, Compensation, and Labor Costs: General ; Monopsony; Segmented Labor Markets ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Technological Change: Choices and Consequences; Diffusion Processes
• Subject: automation ; employment ; labor market concentration ; industrial robots ; wage setting

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chugunova, Marina ; Keller, Klaus ; Azar, Jose ; Samila, Sampsa
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition
• (where): München und Berlin
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282124
• Last update: 10.03.2025, 11:41 AM CET