Improving the effects of industrial robot adoption on employment, total factor productivity, and real wages in 52 world economies and OECD members

Abstract This study investigates the effects of industrial robot adoption in the production process on unemployment rate, employment ratio in manufacturing, and total factor productivity (TFP) growth in 52 countries, and real wage growth in 31 and 20 OECD member countries for 2007–2019. The operating stock of robots per employee significantly impacts these variables; robot adoption lowers the unemployment rate and raises TFP and real wage growth. However, it reduces the employment ratio in manufacturing. In addition, the slight but significant positive contribution of robot adoption is observed only in the 90-percentile (top 10-percentile) of the real wage distribution. Interestingly, workers in the bottom and top tails (10- and 90-percentiles) of the wage distribution asymmetrically benefit from robotization. The industry ratio of value-added improves the labor market by reducing the unemployment rate and raising the employment ratio in manufacturing, TFP growth, and real wage growth. The information and communication technology (ICT) development also positively contributes to the employment ratio in Asia’s manufacturing, TFP growth, and real wage growth.