Robots and reshoring: a comparative study of automation, trade, and employment in Europe

Abstract

Abstract This paper constitutes a comparative assessment of the impact of robots on local labor markets across eight European countries. Doing so, we find that robots generally reduce employment in the manufacturing sector, while their impacts on total employment are more ambiguous. Though local markets experienced significant employment losses in Italy, Norway, and the United Kingdom, we find no statistically significant impact of robots on employment in Germany, Sweden, Denmark, Finland, and Spain. Job losses were seemingly offset by employment gains in other sectors of the economy. We explore two mechanisms that might explain these patterns: differences in investment in complementary job-creating technologies and robot-induced reshoring. Our analysis provides some support for both mechanisms in elucidating the differential impacts of robots on jobs across space.