Robotization, internal migration and rural decline

Abstract

Abstract This paper is the first to analyze the effects of robotization on internal migration flows and rural decline, which is an important driving force of societal and political polarization in many developed economies. Using detailed migration flow data from Austria, I show that robotization has caused significant declines in manufacturing employment, to which populations reacted by increasingly migrating out of affected regions. Since rural regions rely much more than cities on manufacturing employment, these migratory responses largely consist of rural-to-urban flows. Overall, increases in robotization explain roughly one-fourth of rural-to-urban net migration between 2003 and 2016, which is primarily driven by young and medium/low-skilled individuals. Technology-driven labor demand shocks, thus, make an important contribution to rural decline, deepening the cleavage between advantaged and disadvantaged regions.