Research

Digitalization is not gender-neutral (joint with Claus Schnabel) 

 published at Economics Letters, 230 (September 2023): 111256

Using unique linked employer-employee data for Germany and a matching approach, we provide novel insights on the individual-level employment effects of digitalization. We show that the first-time introduction of digital technology in an establishment affects women more strongly than men. This holds both in terms of lower days employed and higher days unemployed. We find that employment losses are largest for individuals conducting non-routine tasks, and again it is women who suffer the most. Our insights imply that digitalization is not gender-neutral, suggesting that it is important to avoid a gender bias in technological progress.

The Impact of Investments in New Digital Technologies on Wages – Worker-level Evidence from Germany (joint with Florian Lehmer and Markus Janser) 

 published at Journal of Economics and Statistics, 239(3): 483–521 

The strong rise of digitalization, automation, machine learning, and other related new digital technologies has led to an intense debate about their societal impacts. The transitions of occupations and the effects on labor demand and workers’ wages are still open questions. Research projects dealing with this issue often face a lack of data on the usage of new digital technologies. This paper uses a novel linked employer-employee data set that contains detailed information on establishments’ technological upgrading between 2011 and 2016, a recent period of rapid technological progress. Furthermore, we are the first to develop a digital tools index based on the German expert database BERUFENET. The new index contains detailed information on the work equipment that is used by workers. Hence, we observe the degree of digitalization on both the establishment level and the worker level. The data allow us to investigate the impact of technology investments on the wage growth of employees within establishments. Overall, the results from individual-level fixed effects estimates suggest that investments in new digital technologies at the establishment level positively affect the wages of the establishments’ workers. Sector-specific results show that investments in new digital technologies increase wages in knowledge-intensive production establishments and non-knowledge-intensive services. The wage growth effects of employees in digital pioneer establishments relative to the specific reference group of workers in digital latecomer establishments are most pronounced for low- and medium-skilled workers. 

Do German Works Councils Counter or Foster the Implementation of Digital Technologies? (joint with Lutz Bellmann and Britta Matthes) 

 published at Journal of Economics and Statistics, 239(3): 523–564 

As works councils’ information, consultation, and co-determination rights affect the decision process of the management, works councils play a key role in the implementation of digital technologies in establishments. However, previous research focuses on the potential of digital technologies to substitute for labor and its impact on labor market outcomes of workers. This paper adds the role of industrial relations to the existing literature by analyzing the impact of works councils on the implementation of digital technologies. Theoretically, the role of works councils in the digital transformation is ambiguous. Using establishment data from the IAB Establishment Survey of 2016 combined with individual employee data from the Federal Employment Agency and occupational level data about the physical job exposure, empirical evidence indicates an ambivalent position of works councils towards digital technologies. The sole existence of works councils is associated with statistically significantly lower equipment levels with digital technologies. However, works councils seem to foster the equipment with digital technologies in those establishments, which employ a high share of workers who are conducting physically demanding job activities. Thus, this study highlights the importance of establishment-level workforce representation for the digital adoption process within Germany. 

German Workforce Adaption to Digitalization 

 published by Friedrich-Alexander Universität Erlangen-Nürnberg (FAU)

This dissertation thesis consists of four essays in empirical labor economics that examine the German workforce’s adaption to digitalization from different angles. In this thesis, digitalization refers to technology that connects machines, products, and humans and conducts complex activities such as problem-solving without human intervention. The first essay sheds light on the diffusion process of the latest technologies within German firms. It examines the extent to which workers can give impulses and shape, via the representation through works councils, the implementation process of digitalization. The second essay explores workers’ employment adjustment to the first-time introduction of digital technologies in establishments. The third essay studies individuals’ wage and employment response to new technologies by focusing on differences between investments into 3.0-technology, e.g., industrial robots, and 4.0-technology, e.g., artificial intelligence. Finally, the fourth essay puts the spotlight on changes in the occupational composition of the workforce in Germany and investigates the role of digitalization for occupational specialization within workplaces. Overall, the present thesis aims to generate novel scientific data on the implementation of digital technologies, provide new empirical evidence on the labor market response of the German workforce, and thereby contribute to the objectification of debate about the future of work.

Equalizing the Effects of Automation? The Role of Task Overlap for Job Finding (joint with Diego Dabed Sitnisky and Emilie Rademakers)

Current version ; Discussion Paper

This paper investigates whether task overlap can equalize the effects of automation for unemployed job seekers displaced from routine jobs. Using a language model, we establish a novel job-to-job task similarity measure. Exploiting the resulting job network to define job markets flexibly, we find that only the most similar jobs affect job finding. Since automation-exposed jobs overlap with other highly exposed jobs, task-based reallocation provides little relief for affected job seekers. We show that this is not true for more recent software exposure, for which task overlap mitigates the distributional consequences.

De-Routinization in the Fourth Industrial Revolution – Firm-Level Evidence  (joint with Melanie Arntz, Terry Gregory, Florian Lehmer, and Ulrich Zierahn)

IZA Discussion Paper

This paper examines the extent to which aggregate-level de-routinization can be attributed to firm-level technology adoption during the most recent technological expansion. We use administrative data and a novel firm survey to distinguish frontier technologies from older technologies. We find that adopters of frontier technologies contribute substantially to deroutinization. However, this is driven only by a subset of these firms: large adopters replace routine jobs and less routine-intensive adopters experience faster growth. These scale and composition effects reflect firms’ readiness to adopt and implement frontier technologies. Our results suggest that an acceleration of technology adoption would be associated with faster de-routinization and an increase in between-firm heterogeneity.

How Do Workers Adjust When Firms Adopt New Technologies? (joint with Terry Gregory, Florian Lehmer, Markus Janser, and Britta Matthes) 

IZA Discussion Paper

We collect novel survey data on firms' technology adoption linked with administrative social security data. We differentiate different technology types and capture technological upgrading regarding automation and digitalization. After providing stylized facts on technology adoption, we compare individual outcomes of workers employed at technology adopters with those at non-adopters. Depending on the technology type, we document improved employment stability, higher wage growth, and increased cumulative earnings in the aftermath of firms' technology adoption. However, changes differ across worker groups: IT-related jobs with analytic tasks benefit most from technological upgrading, coinciding with complex job requirements, but not necessarily with academic skills. 

Digging into the Digital Divide: Workers’ Exposure to Digitalization and Its Consequences for Individual Employment (joint with Claus Schnabel) 

IZA Discussion Paper

While numerous studies have analyzed the aggregate employment effects of digital technologies, this paper focuses on the employment development of individual workers exposed to digitalization. We use a unique linked employer-employee data set for Germany and a direct measure of the first-time introduction of cutting-edge digitalization technologies in establishments between 2011 and 2016. Applying a matching approach, we compare workers in establishments investing in digital technologies with similar employees in establishments that do not make such an investment. We find that the employment stability of incumbent workers is lower in investing than non-investing establishments, but most displaced workers easily find jobs in other firms, and differences in days in unemployment are small. We also document substantial heterogeneities in the employment effects across skill groups, occupational tasks performed, and gender. Employment reactions to digitalization are most pronounced for both low- and high-skilled workers, for workers with non-routine tasks, and for female workers. Our results underline the importance of tackling the impending digital divide among different groups of workers. 

The Role of STEM Occupations in the German Labor Market (joint with Alexandra Spitz-Oener, Alexander Patt and Kai Priesack)

Women in the Gig Economy: Balancing Temporal Flexibility and Compensation (joint with Elisa Gerten, Annabelle Hofer and Lucas Trutwin)

On Task Specialization Across Time, Firms and Workers 

The Nuanced Relationship Between Cutting-Edge Technologies and Jobs: Evidence from Germany 

Published in May 2022 as Brookings Policy Brief