People versus Machines in the UK: Minimum Wages, Labor Reallocation and Automatable Jobs

34 Pages Posted: 10 Nov 2019

See all articles by Grace Lordan

Grace Lordan

London School of Economics & Political Science (LSE) - London School of Economics

Abstract

This study follows the Lordan and Neumark (2018) analysis for the US, and examines whether minimum wage increases affect employment opportunities in automatable jobs in the UK for low-skilled low-wage workers. Overall, I find that increasing the minimum wage decreases the share of automatable employment held by low-skilled low-wage workers, and increases the likelihood that workers in automatable jobs become disemployed. On aggregate the effect size is modest, but I also provide evidence that these effects are larger in more recent years. The study also highlights significant heterogeneity by industry and demographic group, including more substantive adverse effects for older low-skilled workers in manufacturing, as well as effects at the intensive margin.

Keywords: technology, robotics, automation, unemployment, employment, minimum wage

JEL Classification: J23, J38

Suggested Citation

Lordan, Grace, People versus Machines in the UK: Minimum Wages, Labor Reallocation and Automatable Jobs. IZA Discussion Paper No. 12716, Available at SSRN: https://ssrn.com/abstract=3483954 or http://dx.doi.org/10.2139/ssrn.3483954

Grace Lordan (Contact Author)

London School of Economics & Political Science (LSE) - London School of Economics ( email )

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