Production automation upgrades and the mystery of workers' overwork: Evidence from a manufacturing employer-employee matching survey in China

Abstract

The automatic production line will alter the workflow and workshop production system, which will significantly impact how the workers perform their jobs. Using employer-employee matching survey data from the manufacturing sector in Guangdong Province, this paper found that production automation upgrades significantly increase working hours. The findings remain robust even after dealing with endogeneity issues. A plausible explanation is that improved general-purpose technology integrated into the production system will damage employees' unique talents by "deskilling". The heterogeneity analysis shows that labor degradation caused by technological change can be effectively mitigated by labor union protection and the accumulation of workers' human capital. Furthermore, production automation upgrades will probably change the way wages are paid, with less use of the piece-rate system. Although workers may receive some wage compensation for overwork, production automation upgrades may have unfavorable consequences (such as mental health, etc.). This study sheds light on how shop floor workers perform their jobs in the face of the wave of automation, offering fresh policy insights for promoting decent work and achieving inclusive growth.