Does Automation in Rich Countries Hurt Developing Ones? Evidence from the U.S. and Mexico
Following a couple of decades of offshoring, the fear today is of reshoring. Using administrative data on Mexican exports by municipality, sector and destination from 2004 to 2014, this paper investigates how local labor markets in Mexico that are...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/933381552557877093/Does-Automation-in-Rich-Countries-Hurt-Developing-Ones-Evidence-from-the-U-S-and-Mexico http://hdl.handle.net/10986/31425 |
| Summary: | Following a couple of decades of
offshoring, the fear today is of reshoring. Using
administrative data on Mexican exports by municipality,
sector and destination from 2004 to 2014, this paper
investigates how local labor markets in Mexico that are more
exposed to automation in the U.S. through trade fared in
exports and employment outcomes. The results show that an
increase of one robot per thousand workers in the U.S. —
about twice the increase observed between 2004-2014 — lowers
growth in exports per worker from Mexico to the U.S. by 6.7
percent. Higher exposure to U.S. automation did not affect
wage employment, nor manufacturing wage employment overall.
Yet, the latter is the result of two counteracting forces.
Exposure to U.S. automation reduced manufacturing wage
employment in areas where occupations were initially more
susceptible to being automated; but exposure increased
manufacturing wage employment in other areas. Finally, the
analysis also finds negative impacts of exposure to local
automation on local labor market outcomes. |
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