A new study from economists at the Massachusetts Institute of Technology shows that robots become more widely adopted as a population gets older, which fills the gaps in an aging industrial workforce.
Daron Acemoglu is an MIT economist and co-author of the study.
“Demographic change — aging — is one of the most important factors leading to the adoption of robotics and other automation technologies,” says Acemoglu.
According to the study, aging alone accounts for 35 percent of the variation among countries when it comes to the adoption of robots.
“We provide a lot of evidence to bolster the case that this is a causal relationship, and it is driven by precisely the industries that are most affected by aging and have opportunities for automating work,” Acemoglu continues
The paper titled “Demographics and Automation” was published by The Review of Economic Studies. It was also carried out by Pacual Restrepo, an assistant professor of economics at Boston University.
Building Upon Previous Research
The current study builds upon previous papers by the two authors. Those papers covered automation, robots, and the workforce, and they included quantifying job displacement in the U.S. due to robots. It observed the firm-level effects of robot use, as well as identified the 1980s as a key moment in the replacement of jobs by robots.
The new study looked at multiple layers of demographic, technological, and industry-level data from the early 1990s through the mid-2010s. The authors discovered a notable relationship between the aging workforce and robot deployment in 60 different counties.
The researchers also found that 35 percent of the variation in robot use among countries was due to aging alone, and 20 percent of the variation in imports of robots was also due to aging alone.
The Differences Between Countries
When it comes to specific countries, South Korea has been aging most rapidly and adopting robots most widely, while Germany’s older population accounts for 80 percent of the difference in robot implementation between it and the U.S.
“Our findings suggest that quite a bit of investment in robotics is not driven by the fact that this is the next ‘amazing frontier,’ but because some countries have shortages of labor, especially middle-aged labor that would be necessary for blue-collar work,” Acemoglu says.
The two authors also looked into the industry-level data across 129 countries and found that all of this also stands true for non robotic types of automation.
“We find the same thing when we look at other automation technologies, such as numerically controlled machinery or automated machine tools,” Acemoglu says. “We do not find similar relationships when we look at non automated machinery, for example nonautomated machine tools or things such as computers.”
This research can provide insight into other larger-scale trends. For example, there is a notable difference between adopting automation in response to labor shortages and as a way to cut costs and replace workers. While robots in Germany are more often implemented to compensate for the absence of workers, robots in the U.S. often displace the younger workforce.
“This is a potential explanation for why South Korea, Japan, and Germany — the leaders in robot investment and the most rapidly aging countries in the world — have not seen labor market outcomes [as bad] as those in the U.S.,” Acemoglu says.