Technology adoption and jobs: The effects of self-service kiosks in restaurants on labor outcomes

Abstract

This study explores how technology adoption affects labor. I investigate the effect of restaurants' adoption of self-service kiosks on labor outcomes, using survey data from Korea. I find that businesses’ adoption of self-service kiosks had little impact on their number of full-time or part-time workers. However, restaurants with a self-service kiosk decreased both the wages of their part-time workers and the number of unpaid family members they employed. The results are driven by franchise restaurants. Independently owned restaurants that adopted kiosks increased the wages of their full-time workers. These findings provide support for the efficiency wage theory as well as the skill-biased technological change theory. The results suggest that when businesses adopt new technologies, these technologies do not replace unskilled labor, but rather raise the relative wages of skilled workers.