Working paper # 5/2022 – Robots and Polarisation of Labour Markets. Are CEE Countries different?

The impact of technological progress on labour markets has received a great amount of scrutiny. Labour market polarisation is claimed to be one of the more prominent consequences of the recent wave of technological advancement – the digital revolution. However, this claim is not uncontroversial. Questions arise on the scale of polarisation and the universality of this effect across countries. This paper aims to provide insight into this phenomenon in the relatively under-researched EU-CEE countries. Our study, which focuses on the manufacturing sector in EU-CEE countries, shows that increasing robot density is related to shrinking employment in routine, middle-skilled occupations. While we report a positive effect of robot density on employment in lower routine, high-skill occupations, the impact on low-skill occupations is insignificant. Hence, we fail to provide strong evidence in favour of the direct impact of robot density on labour market polarisation.