ALMOST 50 SCHOLARS GRAPPLE WITH LABOUR-MARKET ISSUES AT UNTANGLED FINAL CONFERENCE

Held on 23 November at HIVA KU-Leuven, the conference comprised nine sessions, featuring 30 presentations and drawing 47 participants from research institutes and universities across Europe.

“We had a very productive day, filled with discussions of the dynamic changes occurring in the labour market, such as emerging forms of work, the well-being of workers, and the impact of AI and other technologies on occupations, tasks, and wages,” says Mikkel Barslund, who coordinates the UNTANGLED research consortium. “I am particularly pleased that we could also exchange ideas with our colleagues from other Horizon projects, such as Pillars, GI-NI, and TransEuroWorks.”

The event started with a keynote from Melanie Arntz (ZEW), “De-Routinization in the Fourth Industrial Revolution – Firm-Level Evidence”. She showed that the diffusion of frontier technologies is likely to accelerate deroutinisation. The decline in routine-intensive work will be concentrated among companies that are ready to use technologies most efficiently and make the necessary investments in training to address changing skills needs. Frontier technologies have an inherently self-reinforcing character in terms of deroutinisation. Larger companies are better able to train people, and have a higher share of non-routine cognitive workers. That means they grow faster, which has effects on market concentration.

Generative AI

In the session “Jobs and their Quality,” researchers explored the impact of green investments and the adoption of AI and ICT on the working environment and well-being of employees. Fabrizio Pompei (UNIPG) demonstrated that investing in green technologies enhances industrial relations in Italy, with unions actively contributing to the implementation of ecological transitions. Next, Paweł Gmyrek (ILO) presented a paper on the influence of Generative AI on the quantity and quality of jobs, providing evidence that widespread technology adoption will not kill jobs but alter their nature. He also showed that introducing technology in consultation with workers yields better outcomes in terms of job quality and productivity. In her presentation, Aleksandra Parteka (Gdansk University of Technology) highlighted that employee well-being is linked to the type of technological exposure, with workers who are exposed to software and robots facing worse working conditions than those dealing with AI. Wouter Zwysen (ETUI) concluded the session by exploring the widening polarisation between workers with lower and higher skills in their access to better workplaces.

Karol Madoń (IBS) initiated the Global Value Chains (GVC) session by presenting a paper that demonstrates a negative association between GVC participation and wage inequality in most low- and middle-income countries receiving offshored jobs, while revealing a positive correlation in high-income countries outsourcing jobs. Isabelle Rabaud (University of Orléans) showed that digitalisation reinforces backward GVC participation and that new technologies enhance GVC participation. Zuzana Zavarska (wiiw) showed that investments in digital technologies and business R&D increase specialisations in R&D activities within the value chain, especially benefiting less developed EU countries. Xianjia Ye (Groningen University) wrapped up the session with a discussion of how changes in technology, trade and consumption impact the demand for jobs in particular functions.

The “Skills and Tasks” session centred on the evolution of skills demand and task content in occupations. Lorenzo Navarini (KU Leuven) shared his research on changes in direct and indirect returns to skills. Eduard Storm (RWI) investigated the impact of the growing demand for AI skills, revealing no effects on employment but a positive impact on wages. Finally, Tommaso Ciarli presented survey results indicating that by 2030, NLP and Machine Learning technologies, mobile and collaborative robots, and network management and orchestration technologies will become prevalent and take on roles traditionally performed by technicians and professionals, such as data analysis.

Green transition

During the “Inside Firms and Organizations” session, researchers delved into the impacts of migration, automation, and the green transition on workers and workplaces throughout Europe. Ursula Holtgrewe (ZSI) presented case studies from UNTANGLED, revealing that the influence of three megatrends (technological transformation, globalisation and demographic change) on various sectors is mitigated by employment practices, industrial relations, and market regulations. Zuzanna Kowalik (IBS) followed, with an examination of the effects of automation on skills and power dynamics within shared service centres (SSCs) in Central and Eastern Europe. She highlighted that workers must adapt their skills to remain relevant as Robot Process Automation (RPA) and AI pose threats to routine-intensive tasks within SSCs, impacting both their growth and their competitiveness. A presentation from Anna-Lena Nadler (Leiden University) focused on the political consequences of structural changes that are taking place in labour markets. She argued that these changes have the potential to influence political support for enhanced EU social protection policies.

The “Technology, Jobs, and Wages” session comprised three presentations. Antea Barišic (University of Zagreb) presented compelling evidence indicating that the adoption of new technologies, as measured by factors such as patents, ICT investments, and robot intensity, exerts a limited impact on wages and labour income shares. Florian Schneider (VDMA) shared the results of a systematic literature review, revealing that the overall effects of industrial robot adoption on wages hover close to zero and lack economic significance. Malhotra Raghav (Leicester University) presented a paper examining the influence of technology shock on wage dynamics. Raghav’s findings demonstrated that occupations facing obsolescence are marked by higher salaries (referred to as obsolescence rents) but employ fewer and older workers.

Platform workers

The “Platform and Flexible Work” session looked at emerging forms of work and the associated opportunities and risks for workers. Uma Rani (ILO) explored whether the rise of platform work could facilitate economic catch-up and sustainable development in low-income economies. She proposed policies, institutional arrangements, and regulatory measures to effectively integrate digitalisation with structural reforms. Elief Vandevenne (VUB) concentrated on the impact of platform jobs on workers’ health and well-being, revealing a consistent positive relationship between poor employment conditions and diminished well-being. Rachel Scarfe (Edinburgh University) highlighted the increasing share of part-time jobs in the EU, coupled with a narrowing wage gap between part-time and full-time workers. However, Scarfe questioned whether these trends result from shifts in workers’ preferences or structural changes in firms’ technology. To shed light on this, she developed a labour market model capable of explaining both firms’ and workers’ preferences for part- and full-time work.

Ainhoa Urtasun (UPNA) kicked off the session “Technology Adoption”, examining the impact of robot adoption on workplaces, hiring practices, occupational composition, and skill requirements. Subsequently, Fabien Petit (UCL) and Deyu Li (Utrecht University) presented two papers from the Pillars project. Petit’s presentation revealed that firms prefer to hire workers capable of using a bundle of technologies rather than specific ones. Moreover, only four emerging technologies, namely cloud computing and storage, industrial robotic automation, and workflow management systems, were found to be associated with a positive wage premium. Li demonstrated that occupations highly exposed to technological advances correlate with employment growth in sectors producing automation technologies, while experiencing employment decline in sectors that use automation technologies.

Fertility

The “Regional and Structural Change” session showcased four presentations. Vegard Fykse Skirbekk (FHI) led off by exploring the connection between occupational structural risk and fertility, revealing that higher occupational risk is associated with reduced fertility for both genders. Tommaso Ciarli (UNU-MERIT) presented research from the Pillars project, analysing how exposure to automation across different phases of technological cycles affects employment and wages from a regional perspective. Francesco Venturini (UNIPG) investigated whether areas specialising in AI exhibit more uneven income distribution, finding an 8% decline in labour share for every doubling of the regional stock of AI innovations. Jelena Reljic (Rome University) demonstrated that on average, AI exposure has a positive effect on regional employment, suggesting that areas with a higher proportion of AI-exposed occupations tend to experience more favourable employment trends.

The “Training, Skills, and Working Conditions” session commenced with Patricia Wruuck’s (BMWK) presentation, showing that following the adoption of advanced digital technologies, companies tend to reduce their investment in training per employee while increasing their workforce. Sarah Fleche (UNIV – PARIS 1), in her exploration of the impact of digitalisation on working conditions, argued that use of ICT is correlated with enhancements in non-pecuniary working conditions. Although increased ICT usage leads to improved skills, support, stability, physical integrity, scheduling, and flexibility, it concurrently diminishes autonomy, psychological integrity, and the ability to work at an unconstrained pace. Ludivine Martin (LISER) explored the relationships between digital skills, identifying crucial competencies that individuals and organisations should prioritise to enhance adaptability and resilience in response to changing labour market demands.