Automation, employment and economic outcomes across European industries

This study examines how automation, measured by industrial robot adoption and artificial intelligence (AI) exposure, is associated with labor market and production outcomes across Europe. Using a panel dataset covering 32 European countries and 18 industries from 1994 to 2019, we analyze the relationships between automation technologies and employment, wages, output and gross value added. Robot density is consistently associated with employment reductions in routine-intensive activities. In contrast, higher AI exposure is associated with smaller estimated employment losses linked to robot adoption, a pattern consistent with task reallocation and augmentation mechanisms in knowledge-intensive environments, although the analysis does not directly identify these mechanisms. These associations vary across sectors and across Western European and Central and Eastern European economies, as shown in regional and robustness analyses, underscoring the context-dependent nature of automation's labor-market effects and the importance of tailored policy responses.