Technological anxiety: How robots impact college graduates’ informal employment?

Abstract

ABSTRACT This study estimates the impact of robots on the informal employment of college graduates. Combining data on robot usage from the International Federation of Robotics Reports and the National Employment Survey of College Graduates, we find that a decline in informal employment among college graduates is associated with an increase in robot usage. Further, we exploit a Bartik instrument based on the exposure of robots from the five main importing countries to China to address endogeneity. As a consequence of robotic technological shock, graduates place a greater preference on a job’s reputation, remuneration and stability than flexibility, which reduces their likelihood of engaging in informal employment. Moreover, robots in both the industrial and service sectors have a significant impact on college graduates, and those in the industrial sector are more likely to be squeezed out. Our study suggests an implication for ensuring the quality of college graduates’ development.