Robots, skills and temporary jobs: evidence from six European countries

Abstract

In our analysis of the impact of robot adoption on the use of flexible contracts in six European countries, we find that control for the type of innovation model that is dominant in an industry is crucial. In a ‘high knowledge cumulativeness’ innovation regime, robot adoption reduces the probability that high-skilled workers will receive temporary contracts, while no significant effect has been found for medium- and low-skilled workers. The rationale is: In a high cumulativeness regime, innovation depends on a firm’s internal knowledge sources, and high-skilled (rather than medium- and low-skilled) workers are crucial carriers of knowledge. The situation is different in ‘low-cumulativeness’ regimes. In the latter, firms are primarily using externally acquired knowledge in their innovation process. This makes workers more easily interchangeable and robot adoption significantly increases the probability to get temporary jobs for both medium- and high-skilled workers, but leaves low-skilled workers unaffected.