Automation and the risk of labor market exclusion across Europe

Labor market exclusion represents a major concern in several European economies, particularly affecting highly\r\nexposed demographic groups. This paper examines the potential effect of automation technologies on the risk of\r\nbeing locked into protracted unemployment or inactivity, using Labour Force Survey data for the European\r\nUnion 27 countries and the United Kingdom, between 2009 and 2019. Our study employs repeated cross-sections\r\nof individual-level data to compute probabilities of exclusion outcomes due to automation adoption, controlling\r\nfor several individual, macroeconomic, and region-specific characteristics, and for potential selection mechanisms.\r\nFindings highlight that, on average, the adoption of new automation technologies is associated with a\r\nhigher probability of being inactive. This is consistent with the view that automation may exacerbate job\r\ninsecurity, psychological discouragement, and detachment from job-seeking. This relationship is heterogeneous\r\nacross demographic groups, with younger individuals being relatively more affected.