Automation and Employment over the Technology Life Cycle: Evidence from European Regions

This paper analyzes how the impacts of ICT, Software & Databases, and Robots on European regional labor markets (1995–2017) vary across technology life cycle phases. Motivated by theories predicting shifting skill biases between early adoption and maturity, we first identify major technological breakthroughs and delineate their life cycle phases (early vs. maturity) based on investment growth patterns. Using a shift-share instrumental variable approach, we estimate phase-specific impacts of regional technology exposure on employment and wages. While confirming that effects differ significantly across phases, we find only partial support for standard skill-bias predictions during early adoption. Our results highlight the importance of analyzing dynamics within specific technology life cycles to understand the heterogeneous short-term labor market adjustments often obscured in aggregated long-run analyses.