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Title: Robots, Tasks and Trade
Citation Type: Working Paper
Publication Year: 2018
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Abstract: This paper examines the effects of robotization on trade patterns, wages and welfare. It develops a Ricardian model with two-stage production and trade in intermediate and final goods in which robots can take over some tasks previously performed by humans in a subset of industries. An increase in robot adoption in the North reduces the cost of production and thereby impacts trade in final and intermediate goods with the South. The empirical analysis uses ordinary least squares and instrumental variable regressions exploiting variation in exposure to robots across countries and sectors. Both reveal that greater robot intensity in own production leads to: (i) a rise in imports sourced from less developed countries in the same industry; and (ii) an even stronger increase in exports to those countries. Counterfactual simulations indicate that Northern robotization raises domestic welfare, but initially depresses wages. However, this adverse effect is likely to be reversed by further reductions in robot prices. Northern robotization may lead to higher wages and welfare in the South.
Url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3301062
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Authors: Artuc, Erhan; Bastos, Paulo; Rijkers, Bob
Series Title: World Bank Policy Research Working Paper
Publication Number: 8674
Institution: World Bank
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Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other
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