Ioannis Papadakis
Ph.D. Candidate in Economics

We study the effect of industrial robots in the presence of offshoring. A simple model shows that if robots displace foreign-sourced tasks, automation is necessarily welfare-improving for the domestic economy. If instead robots displace domestically-produced tasks, automation can lower domestic welfare through a deterioration of the terms of trade, even when beneficial in autarky. These results underscore the importance of identifying which workers are in more direct competition with automation. Using data on imports of industrial robots and exploiting variation across industries, occupations and local labor markets, we find that automation displaces US workers, but that its effect is weaker in commuting zones that are more exposed to offshoring. Industrial robots also lower the incidence of offshoring and their negative employment effects are concentrated in non-offshorable occupations. These results are consistent with the view that automation contributes to the reshoring of economic activity, which in turn tends to mitigate any adverse labor market effects for US workers.

We study the effect of Artificial Intelligence (AI) on employment across US commuting zones over the period 2000-2020. A simple model shows that AI can automate jobs or complement workers, and illustrates how to estimate its effect by exploiting variation in a novel measure of local exposure to AI: job growth in AI-related professions built from detailed occupational data. Using a shift-share instrument that combines industry-level AI adoption with local industry employment, we estimate robust negative effects of AI exposure on employment across commuting zones and time. We find that AI's impact is different from other capital and technologies, and that it works through services more than manufacturing. Moreover, the employment effect is especially negative for low-skill and production workers, while it turns positive for workers at the top of the wage distribution. These results are consistent with the view that AI has contributed to the automation of jobs and to widen inequality. 

How do directors impact robot adoption? Despite growing recognition of leadership in decision-making, we lack evidence on how corporate leaders shape technology. In this paper, I advance and corroborate empirically a hitherto undocumented mechanism: the role of nationality. The analysis benefits from corporate balance-sheet data with firm-director links and administrative trade data, where I can trace directors’ nationality and identify robots. Leveraging plausibly exogenous spatial variation in the supply of directors, I provide evidence of this mechanism for UK-based firms for the period 2009-2019. I show that a 10% increase in the number of US and Japanese directors (top-2 non-EU robot exporting countries) increases the probability of importing non-EU robots by about 0.1 percentage points. To probe this mechanism further, I turn to a battery of alternative specifications and an industry-level analysis that show consistent evidence. Further, the effect is concentrated in the manufacturing sector and confined mostly to machines. To guide the analysis and rationalise the evidence, I present a simple model with tasks-based production and heterogeneous in productivity firms that face a trade-off: to import robots and increase their productivity, they need to pay a premium to appoint foreign directors. Taken together, the findings highlight the role of directors’ nationality in the diffusion of technologies produced abroad. Robots are a prime example as I document that their production is concentrated in a few countries making their sourcing and deployment more costly.

This paper studies the impact of automation on labour dynamism. Analysing labour flow data across US local labour markets, I find that automation reduces both worker flows (hires and separations) and job flows (job creation and destruction). Further, reductions in hires (job creation) rather than increases in separation (job destruction) cause declines in employment growth. Hence, work becomes more stable and firms adjust to automation at the hiring (job creation) margin. Interestingly, the impact is different between commuting zones and depends on the initial local occupational specialisation in routine jobs. Although, this labour mobility effect could indicate improved job quality, I find that it comes at the expense of wage growth. The analysis by firm and worker demographics reveals that more stable groups experience larger reductions in average earnings. Taken together, these results underscore the importance of understanding automation in conjunction with labour mobility: they suggest that automation affects adversely average earnings by reducing labour reallocation, an important source of welfare gains for workers, and by displacing workers with few re-employment opportunities.

This paper considers two distinct local labor demand shocks and studies how local US labor markets and different occupation groups adjust. I examine the effects of local employment contractions on wage growth and compare it to routine employment shifts at commuting zone level. This reveals a reversal of the initially positive association between employment and wages before and after the year 2000. Further, I find that both effects vary with the economic conditions; namely, they intensify in regions experiencing a general employment contraction. Interestingly, I also find that the geography of occupations matters for wage growth since both labor demand shocks have a sizeable difference in their effect when they take place in routine-job intensive commuting zones.

Much has been written about the benefits of intellectual property rights (IPRs), including their effects on international trade.  Based on the introduction of IPR protections by developing countries from the mid-1990s onwards, this research has found that these policies worked largely to safeguard the IPR of developed countries and increase flows of R&D intensive products into IPR adopting countries. Legal costs remain a significant barrier to securing IPRs for low-value innovation in most countries, however, potentially limiting trade. In this paper we contribute to this literature, by studying the impact of a reduction in IPR-related costs within a developed country, the UK, on imports. We find that this UK IPR Court reform increased low-tech imports, decreased their prices, and had a positive effect on imports from high income countries, but had no impact on imports from low-income countries. Taken together, the results suggest that by removing legal barriers, the UK increased its domestic welfare and engagement in trade with high-income countries.