Robots Replacing Trade Unions: Novel Data and Evidence from Western Europe

Historically, labor unions have played a crucial role in liberal democracies by hindering the increasing wage inequality, by channeling political demands and discontent into an organized voice, and by linking blue-collar constituencies to mainstream left parties. However, the importance and effectiveness of unions in the democratic process have progressively diminished in the last decades, combined with an atomization of political demands. We suggest that technological change, and robotization in particular, have directly contributed to weakening the role of unions. We employ novel granular data, at the subnational and sector level, on union density in Western Europe over two decades, to estimate the impact of industrial robot adoption on unionization rates. We find that regions more exposed to automation experience a decrease in union density. This evidence contributes to explain why technologically-driven economic grievances tend to express a decidedly right-wing character and do not favor pro-redistribution left-wing parties. This is a joint work with Paolo Agnolin, Italo Colantone, Piero Stanig