The impact of the industrial robots on the employment rate and wages: prospects of circular economy and sustainable development

Abstract

Purpose

This study aims to investigate whether the increasing robot adoption will affect employment rate and wages to contribute to the economic cycle and sustainable development in the world.

Design/methodology/approach

The authors introduce a two-way fixed effect model and ordinary least-squares (OLS) model to evaluate the influence based on relevant data of the eighteen countries with the largest robot stocks and robot densities in the world from 2006 to 2019 to test the influences and do the robustness test and endogeneity test by using empirical models.

Findings

The authors’ research findings suggest that increasing robot adoption can cause strong negative impacts on employment for both males and females in these economies. Second, the effect of robots on reducing job opportunities has penetrated different industries. It means that this negative impact of robots is comprehensive for the industry. Third, robot adoption can have a strong positive influence on wages and increase workers' incomes.

Research limitations/implications

The limitations of the study are that the influence of industrial intelligence technologies on the circular economy is diversities in different countries. Thus, this study should consider the development levels of different economies to do additional confirmatory studies.

Practical implications

This study makes out the correlations between industrial robots and the employment market from the circular economy perspective. The result proves the existence of this influence relationship, and the authors propose some suggestions to promote sustainable economic development.

Social implications

This paper addresses the activity of industrial intelligence technologies in the labor market. The employment market is an important part of the circular economy, and it will benefit social development if the government provides appropriate guidance for social investment and industrial layout.

Originality/value

This study is one of the few studies which considered the impact of industrial robots on employment and wages from the perspective of different industries, and this is very important for the circular economy in the world. The results of this paper provide an instructive reference for government policymakers and other countries to stabilize the labor market and optimize human resources for sustainable economic development.

Citation

Zhu, H., Zhang, X. and Yu, B. (2023), "The impact of the industrial robots on the employment rate and wages: prospects of circular economy and sustainable development", Management Decision, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MD-03-2023-0315