How digital technology affects working conditions in globally fragmented production chains: Evidence from Europe

Abstract

This paper uses a sample of over 9 million workers from 22 European countries to study the intertwined relationship between digital technology, cross-border production links and working conditions. We compare the social consequences of technological change exhibited by three types of innovation: computerisation (software), automation (robots) and artificial intelligence (AI). To fully quantify work-related wellbeing, we propose a new methodology that amends the information on remuneration by reference to such non-monetary factors as the work environment (physical and social), career development prospects, or work intensity. First, we show that employee wellbeing is related to the type of technological exposure. Employees in occupations with a high degree of software or robot exposure face worse working conditions – contrary to highly AI exposed occupations. Thus, we find that AI technologies differ from previous waves of technological progress - also in relation to workers' wellbeing. Additionally, we show that the relationship between digital technology and working conditions weakly depends on participation in global production chains.