Minimum wages and rise of the robots / Erik Brynjolfsson, J. Frank Li, Javier Miranda, Robert Seamans, Andrew Wang ; editor: Halle Institute for Economic Research (IWH) - Member of the Leibniz Association

Abstract

We study the link between minimum wages and technology adoption. Linking robot import records to Census microdata, we construct a new plant-level panel of industrial robot adoption from 1992 to 2021. Our preferred design compares manufacturers in county pairs along state borders. Across specifications, a 10 percent higher minimum wage is associated with 8 to 12 percent higher robot adoption, relative to the mean. Within firms, adoption is followed by 8.1 percent higher total wages and 3.2 and 2.7 percent higher earnings per worker and per production worker. These results suggest automation as a margin of adjustment to minimum wages.