Working Paper No. 1382

Artificial Intelligence, Robotics, Work and Productivity: The Role of Firm Heterogeneity

Published: February 11, 2021Pages: 57Keywords: AI&R Technology; Automation; Job displacement; Firm Heterogeneity; Matched employer-employee dataJEL-codes: D20; J24; L20; O33

Artificial Intelligence, Robotics, Work and Productivity: The Role of Firm Heterogeneity Fredrik Heyman, Pehr-Johan Norbäck and Lars Persson


We propose a model with asymmetric firms where new technologies displace workers. We show that both leading (low-cost) firms and laggard (high-cost) firms increase productivity when automating but that only laggard firms hire more automation-susceptible workers. The reason for this asymmetry is that in laggard firms, the lower incentive to invest in new technologies implies a weaker displacement effect and thus that the output-expansion effect on labor demand dominates. Using novel firm-level automation workforce probabilities, which reveal the extent to which a firms’ workforce can be replaced by new AI and robotic technology and a new shiftshare instrument to address endogeneity, we find strong empirical evidence for these predictions in Swedish matched employer-employee data.


Reference:

Heyman Fredrik, Pehr-Johan Norbäck and Lars Persson (2021). "Artificial Intelligence, Robotics, Work and Productivity: The Role of Firm Heterogeneity". IFN Working Paper No. 1382. Stockholm: Research Institute of Industrial Economics (IFN).

Fredrik Heyman

Contact

Ph: +46 8 665 4537
fredrik.heyman@ifn.se

Pehr-Johan Norbäck

Contact

Ph: +46 8 665 4522
Mob: +46 73 574 3379
pehr-johan.norback@if...

Lars Persson

Contact

Ph: +46 8 665 4504
lars.persson@ifn.se

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