Induced Automation Innovation: Evidence from Firm-Level Patent Data

David Hémous, Morten Olsen, Carlo Zanella, Antoine Dechezleprêtre · Journal of Political Economy · 13 Jan 2025

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Abstract

Do higher wages induce more automation innovation? We identify automation patents in machinery. We show that a higher automation intensity predicts a decline in routine tasks across US sectors. Then, we estimate how innovating firms respond to changes in their downstream firms’ low- and high-skill wages. We compute these wages by combining macroeconomic data on 41 countries with innovating firms’ global market exposure. Higher low-skill wages increase automation innovation (but not other machinery innovation), with an elasticity of 2–5. Finally, we show that the German Hartz labor market reforms reduced automation innovations by foreign firms more exposed to Germany.

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Top journal. One of the journals economics departments rank highest: the “top five” economics journals, and the general-science journals Science and Nature.

Placed by: Top five economics journals. How sources are ranked.

Published: 2025 (21 months ago)
Citations: 29 (OpenAlex)

Citations in context

29 citations — 76th percentile among the 33 indexed papers from 2025 in this collection. Citation counts favor older papers; this compares only same-year papers here, not the whole literature.

□ added to this collection in 2026.

David Hémous signed the wemustactnow.ai letter · author affiliation matches seed institution university of zurich — part of why this paper is in the collection.

Induced Automation Innovation: Evidence from Firm-Level Patent Data

Abstract

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