TRADE: Robots, Tools, and Jobs: Evidence from Brazilian Labor Markets; Dr Haishi Harry Li (The University of Hong Kong)

Abstract

What is the effect of robots and tools on employment and labor market inequality? Using natural language processing and an instrumental variable approach, we discover that robots have led to a sizable decrease in the employment and wages of low-skilled workers in operational occupations. However, tools–machines that complement labor–have led to an equally large reinstatement of these workers, increasing their employment and wages. Using a quantitative model, we find that the lower prices of robots and tools over the last 20 years have reduced labor market inequality and increased welfare without a significant effect on employment.

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