The impact of Robots on Labour market transitions in Europe.

• We investigate the effects of robot exposure on worker flows in 16 European countries between 2000 and 2017, and the role of labour costs in this context. • Robots have small beneficial effects on job separations and no effect on job findings. • There are large cross-country heterogeneities that depend on initial labour costs: in countries with relatively low or average levels of labour costs, higher robot exposure led to lower job separation rates, and, thus, improved job stability, to a much larger extent than in countries with high levels of labour costs. In countries with relatively low or average levels of labour costs, higher levels of robot exposure led to increased job findings. • There are important differences between workers performing different job tasks, with generally more beneficial effects for routine workers than for non-routine workers. Our results point to the importance of labour costs for the substitutability of workers performing different job tasks by robots. • The effects of robots on worker flows had important implications for employment rates. Rising robot exposure increased employment, particularly in countries with low or average labour costs. These aggregate results were mainly due to reduced separations rather than increased hirings. We study the effects of robot exposure on worker flows in 16 European countries between 2000 and 2017. Overall, we find small negative effects on job separations and no effects on job findings. We detect significant cross-country differences and find that labour costs are a major driver: the effects of robot exposure are generally larger in absolute terms in countries with relatively low or average levels of labour costs than in countries with high levels of labour costs. These effects are particularly pronounced for workers in occupations intensive in routine manual or routine cognitive tasks but are insignificant in occupations intensive in non-routine cognitive tasks. A counterfactual analysis suggests that robot adoption increased employment and reduced unemployment, especially in European countries with relatively low or average levels of labour costs, and that these effects were driven mainly by lower job separations. [ABSTRACT FROM AUTHOR]