Hosted by Professor: Virgiliu Midrigan- email@example.com
I use administrative data that link workers, firms, and robots in Denmark to study the distributional impact of industrial robots. I structurally estimate a dynamic model of the firm that rationalizes how firms select into and reorganize production around robot adoption. Using event studies, I find that firms expand output, lay off production workers, and hire tech workers when they adopt industrial robots. I embed the firm model into a dynamic general equilibrium framework that takes into account the ability of workers to reallocate across occupations in response to robots. To this end, I develop a fixed-point algorithm for solving the general equilibrium that features two-sided (firm and worker) heterogeneity and dynamics. I find that industrial robots have increased average real wages by 0.8 percent but have lowered real wages of production workers employed in manufacturing by 6 percent. Welfare losses from robots are concentrated on old production workers, as younger workers benefit from the option value of switching into tech and other occupations whose premiums rise as robots diffuse in the economy. Industrial robots can account for a quarter of the fall in the employment share of production workers and 8 percent of the rise in the employment share of tech workers since 1990. I use the estimated general equilibrium model to evaluate the dynamic incidence of a robot tax.