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What Happens to Workers at Firms that Automate?

Author

Listed:
  • James Bessen

    (Boston University)

  • Maarten Goos

    (Utrecht University and Tilburg University)

  • Anna Salomons

    (Utrecht University and Tilburg University)

  • Wiljan van den Berge

    (Utrecht University)

Abstract

We estimate the impact of firm-level automation on individual worker outcomes by combining Dutch microdata with a direct measure of automation expenditures covering all private nonfinancial sector firms. Using a novel difference-in-differences event-study design leveraging lumpy investment, we find that automation increases the probability of incumbent workers separating from their employers. Workers experience a five-year cumulative wage income loss of 9% of one year’s earnings, driven by decreases in days worked. These adverse impacts of automation are larger in smaller firms, and for older and middle-educated workers. By contrast, no such losses are found for firms’ investments in computers.

Suggested Citation

  • James Bessen & Maarten Goos & Anna Salomons & Wiljan van den Berge, 2025. "What Happens to Workers at Firms that Automate?," The Review of Economics and Statistics, MIT Press, vol. 107(1), pages 125-141, January.
    • Handle: RePEc:tpr:restat:v:107:y:2025:i:1:p:125-141
    DOI: 10.1162/rest_a_01284
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    Cited by:

    1. Muffert, Johanna & Winkler, Erwin, 2025. "Using Machine Learning to Understand the Heterogeneous Earnings Effects of Exports," IZA Discussion Papers 17667, Institute of Labor Economics (IZA).

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