A 1 percentage point increase in the share of non-Western immigrants reduces the probability of robot adoption by 12%. The effect is stronger for immigrants who are young, low-skilled and work in routine occupations. Immigrants are more likely to work in routine occupations (e.g., manufacturing, machine operators) that are easier to automate. The increased supply of such labor reduces the pressure to invest in automation. The effect applies to both the initial adoption of robots and the decision to scale up robotization (intensive margin). No similar effect was observed on overall capital investment or imports of non-automation machines (robot-specific effect). The results remain significant after controlling for a number of variables (sales, firm size, employee characteristics). They were also confirmed in alternative data (e.g., VITA 2018+ survey, robotics occupations data). Immigration increases the supply of cheap, routine labor → lower wages in this segment → less profitable investment in robots, which are costly and replace the same tasks. In the context of aging populations and labor market deficits, the results suggest that immigration may delay automation. The theoretical model presented in the Appendix assumes that robots and routine workers are substitutes, which is empirically confirmed.
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