Minimum Wage, Workforce Composition, and Robot Adoption in Germany

We study the effect of the minimum wage on robot adoption in Germany. By exploiting the variation of whether and to what extent a plant is affected by the minimum wage introduced in 2015, we document a positive effect of the minimum wage exposure on plant-level robot adoption. Using administrative worker-level data, we find that the minimum wage introduction raises the incentives for plants to adopt robots only when it affects the workers in simple manual occupations.

The empirical findings are consistent with the prediction through the relative factor price channel based on a task-based model of robot adoption.

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