Brown bag - Gustavo de Souza (SU)

Seminar

Date: Tuesday 14 June 2022

Time: 12.00 – 13.00

Location: The Cassel Room

Tuesday, June 14 at 12:00 in the Cassel Room (A700).

Gustavo de Souza, IIES, Stockholm University.

"Robots, Tools, and Jobs: Evidence from Brazilian Labor Markets".

Abstract:
We quantify the effects of changes in the prices of labor-saving and labor-augmenting machinery on the labor market. Using a task-based production model we show that, while lower prices of labor-augmenting machines unambiguously lead to higher wages and employment, changes in the price of labor-saving technologies have an ambiguous effect. Empirically, we use Brazilian administrative data on capital imports to classify machines into labor-saving and labor-augmenting with textual analysis. We leverage exogenous variation in machine prices due to import tariffs in Brazil to show that the adoption of labor-saving technology negatively impacts wages and employment; however, it tends to be followed by an increase in the use of labor-augmenting machines by other firms, which have the opposite effect. As a result, a 1\% reduction on tariffs on capital imports leads to an increase in employment of 0.2\%. Our conclusions show the importance of taking into account the role of labor-augmenting technology on the labor market.