Post-Automation Workforce Dynamics in (Non-)Multinationals
Abstract: We estimate the impact of automation on worker separations and wages across Multinationals (MNEs) and domestic firms within the matched employer-employee dataset of the Netherlands. In MNEs, spikes in automation costs lead to a 24% separation rate, with the remaining workforce experiencing 2% wage growth. Higher-educated workers, those with a background in ICT and Sciences, and managers gain 5-8% wage growth. In contrast, domestic firm automation spikes lead to a 11% separation rate, with remaining workers experiencing a 1.4% wage decline, mostly confined to lower-educated workers. The difference is not explained by flexible contracts in MNEs, exports, imports, or industry. Firm-level hires reduce in both types of firms. Additionally, we document that firms’ spikes in ICT investments raise MNE wage growth, while they lower wage growth in domestic firms. Machinery investments show no differential impact between MNEs and domestic firms.