The Effect of Robotization in OECD Countries on Latin American Labor Markets

Pillars Report

The rise of robots has raised a controversial discussion about their disruptive impacts on domestic labor markets. Robot adoption, which is largely concentrated in a few high-income countries, might also affect labor markets of trade partners through global value chain linkages. This effect could be even more pronounced in developing countries due to the predominance of routine tasks and labor-intensive activities. Using data on global value chain linkages between countries and sectors, we evaluate the impact of robot adoption in OECD countries on labor markets in Latin American countries. We show that the rise of robots in OECD countries is associated with an increase in employment in the production of intermediate goods in Latin America, whereas no effect is found for final demand.