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  Labor Supply and Automation Innovation

Danzer, A. M., Feuerbaum, C., & Gaessler, F. (2020). Labor Supply and Automation Innovation. IZA DP, No. 13429.

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https://ssrn.com/abstract=3646853 (Preprint)
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Also published as: Max Planck Institute for Innovation & Competition Research Paper No. 20-09
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https://ssrn.com/abstract=3646853 (Preprint)
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Also published as: CESifo Working Paper No. 8410
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 Creators:
Danzer, Alexander M.1, Author
Feuerbaum, Carsten2, Author           
Gaessler, Fabian2, Author           
Affiliations:
1External Organizations, ou_persistent22              
2MPI for Innovation and Competition, Max Planck Society, ou_2035292              

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Free keywords: labor supply ; automation ; innovation ; patents ; labor market tightness ; quasiexperiment
 Abstract: While economic theory suggests substitutability between labor and capital, little evidence exists regarding the causal effect of labor supply on inventing labor-saving technologies. We analyze the impact of exogenous changes in regional labor supply on automation innovation by exploiting an immigrant placement policy in Germany during the 1990s and 2000s. Difference-in-differences estimates indicate that one additional worker per 1,000 manual and unskilled workers reduces automation innovation by 0.05 patents. The effect is most pronounced two years after immigration and confined to industries containing many low-skilled workers. Labor market tightness and external demand are plausible mechanisms for the labor-innovation nexus.

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Language(s): eng - English
 Dates: 2020
 Publication Status: Issued
 Pages: 69
 Publishing info: Bonn : IZA – Institute of Labor Economics
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Title: IZA DP
Source Genre: Series
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Pages: - Volume / Issue: No. 13429 Sequence Number: - Start / End Page: - Identifier: -