Types: past

In the first of three presentations, Ursula Holtgrewe (ZSI) discussed project UNTANGLED case studies in manufacturing and financial services, which examined the impact of digitalisation and globalisation on employment, job quality and inequality. The research revealed that technological changes and their adoption are characterised by incremental advances, rather than disruptive innovations. Holtgrewe pointed out that analysis of employment showed (skilled) staff shortages in all cases, leading to intense competition for highly skilled workers across sectors. However, labour shortages did not necessarily improve job quality and wages. At the same time, automation posed a risk to low-skilled workers, for instance in the manufacturing sector, even though for now the replacement of workers by robots has been compensated for by expanding markets. Regarding skill changes, the UNTANGLED researchers found that automation could lead to upskilling and retraining workers in both sectors. However, inequality persisted in training and learning, with more opportunities reserved for highly skilled employees. Discussing job quality changes, Holtgrewe argued that the automation of routine-intensive tasks led to work intensification, which limited the space for teamwork and peer learning.

Anna Milanez (OECD) presented cross-country case studies exploring the impacts of AI technologies on the labour market. Researchers demonstrated that manufacturing and finance companies adopted several AI technologies, including computer vision, natural language processing, and machine learning. Among the occupations most often impacted by technological changes were customer service representatives and maintenance & repair workers. Milanez emphasised that redundancies were rare due to the limited advancement of AI technologies. Instead, automation targeted minor tasks within jobs. Labour shortages caused worker reallocation within firms, and companies prioritised improved product or service quality over labour cost savings. Milanez also argued that the impacts of AI and AM on job quality are mixed. While AI technologies were credited with improving physical safety, working conditions, mental well-being, and engagement, conflicting perspectives existed, with workers often expressing ambivalence and reporting increased work intensity and stress.

Trine Pernille Larsen and Anna Ilsøe (FAOS) discussed their new research on the Danish manufacturing sector, AI adoption, and its effects. Their data showed that the industry recently increased its use of AI and Algorithmic Management (AM) technologies. They also addressed recent debates in Denmark caused by the widespread adoption of technology, which centred around worker surveillance, data security, health and safety risks, legal implications, and the impact on wages and working conditions. Larsen and Ilsøe also presented their findings on how AI affects job tasks, training, and mobility.

Ursula Holtgrewe presentation is available here.

Anna Milanez presentation is available here.

The workshop will present results from Project UNTANGLED on demographic trends and their underlying forces, as well as other insights into how technologies including automation can be used to address the challenges those trends pose for societies in the European Union and beyond.

The workshop will feature presentations from:

• Vegard Skirbekk, a professor at the Columbia Aging Center, Columbia University and a Senior Researcher at the Norwegian Institute of Public Health
• Klaus Prettner, a professor of Macroeconomics and Digitalisation at the University of Economics and Business Administration in Vienna

Maryna Tverdostup, an economist at wiiw and a country expert for Estonia, and wiiw Scientific Director Robert Stehrer will serve as the moderators.

To participate, please register here.

During the 22 November online debate, part of the final conference of Project UNTANGLED, moderator Karolien Lenaerts (HIVA-KU Leuven) posed the question of whether we are approaching a golden age for workers. In response, most panellists agreed that the growing labour shortages are exerting upward pressure on wages and working conditions, theoretically brightening the prospects for employees.

Frank Siebern-Thomas (Green, and Digital Transitions, Research Unit, DG Employment, Social Affairs and Inclusion, European Commission) highlighted that three-fourths of European SMEs currently face skills and labour shortages, while two-thirds of European companies cannot find IT specialists. While optimistic about worker prospects, he underscored the risks and structural challenges that EU governments and firms must address. These challenges include reskilling the European workforce to adapt to evolving job roles resulting from technological advances and the transition to a green economy.

Siebern-Thomas also noted that the European Commission is aware of these challenges and committed to addressing them through initiatives such as the European Year of Skills, focusing on upskilling, training, and innovation initiatives across member states.

“Is this a golden age for workers? Maybe, but much depends on policies and their effective implementation,” Siebern-Thomas said.

Melanie Arntz (ZEW), also optimistic about workers’ prospects, emphasised additional challenges that must be addressed for a golden age to materialise. She said particular attention should be directed to taxes and transfer systems and how they create incentives for working full-time. Arntz also raised concerns about AI and other technologies potentially devaluing certain skills and knowledge, leading to declining returns on formal education.

“It will be more difficult for people to guess what the return on formal education will be, which means they may underinvest in education because they might not be sure how much they’ll get out of it,” she said. “Therefore, we should provide as much transparency as we can on all these trends, so people can orient themselves around this new labour market.”

Arntz also highlighted another challenge: technology-driven mental stress among workers.

Marguerita Lane (Future of Work team, OECD) focused on the positive impact AI can have on the workforce. She highlighted the technology’s potential to boost productivity, alleviate sluggish growth, reduce the need for human labour in routine and manual work, and liberate workers from unsafe, repetitive, and monotonous tasks. Lane stressed that AI also has the potential to bridge inequality by enabling lower-skilled workers to level up. Similar to previous speakers, Lane emphasised that these positive outcomes can only materialise with the right policies and social safety nets in place.

“It is about policy choices; in this disruptive time, we need a smooth transition, and for this we need public services, governments, and companies to support workers displaced by new technologies,” Lane said.

Robert Stehrer (wiiw) took a less optimistic stance on the prospects for workers. Citing recent literature, he argued that the impact of new technologies such as AI on the labour market may not be very significant, and might not help overcome labour shortages. Stehrer also highlighted that the shrinking and ageing of the EU population places a burden on the healthcare and pension systems. According to Stehrer, it is plausible that we are entering a period of secular stagnation: a prolonged period of negligible economic growth.

“Even if there are higher wages, these will need to be taxed to meet the demands of the healthcare and pension system,” Stehrer concluded.

The discussion also covered areas such as working conditions, the challenges faced by platform workers, the potential and the difficulties of undeclared work, opportunities for migration to the EU, and gender dimensions within the workforce. Additionally, it explored how the evolving labour market is influencing the welfare state.

The UNTANGLED debate sheds light on the broad and diverse landscape of opportunities and challenges that makes up today’s labour market. The path to any golden age for workers must pass through that terrain, and technological advances in and of themselves aren’t enough to ensure a safe journey. Instead, it will require thoughtful implementation of policies that uphold the well-being and resilience of the workforce in the face of unprecedented changes.

The 9 November meet-up, organised by ZSI, featured five presentations, and attracted 16 participants.

Wojciech Szymczak (IBS) presented a recent UNTANGLED policy brief showing ways to foster lifelong learning in markets where demand for skills is changing rapidly due to technological advances. As automation makes some skills obsolete, the demand for people who can perform non-routine tasks is increasing. Moreover, while technology-driven changes are increasing the demand for digital skills, specific social skills have also gained importance. Szymczak argued that policymakers must implement policies that support lifelong learning and tailor-made reskilling programmes, and adopt new attitudes toward adult education to address the skills mismatch.

LISER’s Ludivine Martin presented key insights from a paper co-authored with Laetitia Hauret, shedding light on how employers in Luxembourg address shortages of workers without university degree. In 2022, 76% of Luxembourg companies with over five employees struggled to fill positions requiring lower educational attainment than a tertiary degree. To address this challenge, they implemented three strategies: recruiting outside Luxembourg (54%), hiring and training individuals not perfectly fit for the job (49%), and increasing salaries (27%). Data from the 2021 European Working Conditions Survey showed that among craft and trades workers, workers in job roles facing facing labour shortages on average encountered significantly poorer working conditions than those in similar positions not affected by shortages.  Martin concluded that improving working conditions might be another strategy to mitigate hiring challenges in manufacturing.

Karina Doorley (ESRI) presented a recent UNTANGLED paper, which analyses the impact of automation on household income inequality in Europe. The paper, written jointly with Piotr Lewandowski, Jan Gromadzki, Dora Tuda, and Philippe Van Kerm, shows that robot adoption has increased wage inequality due to job polarization. However, welfare systems in Europe so far mitigate the negative effects that robot adoption has on wages and employment and cushion households’ market income losses.

Istanbul University’s İlayda Emine Nilüfer explored the impact of the Covid-19 pandemic on inequality, examining areas such as health, education, and the welfare state. Nilüfer found that the pandemic deepened inequality, and inequality increased the severity of the pandemic as well. Her findings suggested that digital inequality was a crucial factor influencing educational outcomes during Covid-19.

Philip Schörpf (FORBA, Vienna) talked about his ongoing research with Myriam Gaitsch that looks into how adoption of new technologies in the workplace and new forms of collaboration intensify work and exacerbate stress. They combine digital self-tracking of participants’ biometric data in the study with diaries and interviews in the beginning and at the end of the working week, and discuss results in focus groups or health circles. Schörpf and Gaitsch found that as teamwork becomes digitalised, employees increasingly self-structure and manage parts of the labour process. What is more, they observed that digitalisation impacts women and men differently. Women in team settings were more often responsible for emotional tasks necessary to deal with organisational shortcomings; they were also more often available outside their working hours.

The slides from the event, with further links to the projects and outputs discussed, are available here.

The event, organised on 15 June in Warsaw by UNTANGLED partner the Institute for Structural Research (IBS), consisted of four sessions devoted to: the impact of technology on skills; worker flows; skills; and inequality. During the breaks, participants engaged in a discussion with the authors of four posters: Honorata Bogusz (UW), Agnieszka Kasperska (UW), Zuzanna Kowalik, and Karol Madoń (IBS).

The day focused on technological progress and skills and started with a presentation by Terry Gregory(LISER), on “Task Shifts in the Fourth Industrial Revolution – Firm-Level Evidence” (paper with Melanie Arntz, Sabrina Genz, Florian Lehmer, and Ulrich Zierahn-Weilage). The authors show that the decline of routine tasks in Germany is not linked to technology adoption within firms. Instead, de-routinisation can be explained by the scale and composition effects of firms adopting cutting-edge technologies, such as artificial intelligence. Myrielle Gonschor (RWI) presented a paper written with Ronald Bachmann titled “Technological Progress, Occupational Structure, and Gender Gaps in the German Labour Market”. She showed that in recent decades, women have increasingly entered non-routine cognitive and interactive occupations at the higher end of the wage distribution. However, while the gender gap has narrowed at the median and lower percentiles of the wage distribution, it did not in the best-paying occupations. Anna Matysiak (Labfam, UW) also presented a paper focused on gender, “Digitalisation, Changing Demand for Skills and the Gender Inequality in Earnings”, written with Wojciech Hardy and Lucas van der Velde. The authors find that in European countries, women are overrepresented in occupations that require social outward tasks, but they benefit from a wage premium in occupations that involve social inward tasks. Femke Cnossen (University of Groningen) presented her paper “Learning the Right Skill: Vocational Curricula and Returns to Skill”, co-written with Matloob Piracha and Guy Tchuente. She assessed to what extent basic and cross-functional skills are incorporated in Dutch vocational curricula and whether these skills can account for the wage differences among graduates. The paper shows that social and resource management skills are positively associated with earnings, especially in environments that require coordination, such as management-oriented occupations, large firms, and high-skilled service sectors. Meanwhile, basic content and technical skills are relatively more important in low-skill services.

Several speakers discussed the impacts of the COVID-19 pandemic. Duncan Roth (IAB) presented the paper “The Pandemic Push: Digital Technologies and Workforce Adjustments”, co-authored with Christina Gathmann, Christian Kagerl, and Laura Pohlan. He argued that the pandemic triggered the diffusion of digital technologies in Germany. About two in every three firms invested in digital technologies to improve decentralised communication, management and coordination, as well as training. These investments shielded workers against the impact of the pandemic, as investing firms relied less on short-term work, and laid off fewer marginal workers. Male, younger and medium-skilled workers benefitted the most from the insurance effect of digital investments. Sarra Ben Yahmed (ZEW) talked about how the pandemic influenced occupational mobility in Germany (paper with Melanie Arntz, Eduard Brüll, and Michael Stops). The initial findings indicated that workers shifted towards occupations of lower working quality, i.e.,, to less satisfying, more stressful, and more physically demanding jobs with longer working hours.

Two papers focused on worker flows in the context of decarbonisation. Florian Lehmer (IAB) spoke on “Worker Flows in the Low Carbon Transition” (study with Ronald Bachmann, Markus Janser, and Christina Vonnahme). He showed that in Germany, the growth rate of green occupations surpasses that of brown occupations, and brown occupations experienced a decline during the Covid pandemic. However, direct transitions from brown to green occupations are relatively limited, and worker upskilling from brown jobs could pose a significant challenge. Ilse Tobback (HIVA) studied a similar topic in Belgium (paper with Mikkel Barslund). Their research shows that the share of employees in brown occupations is declining with some workers transferring to green occupations which offer earnings premiums.

Finally, two presentations discussed inequality. Cristiano Perugini (University of Perugia) presented a paper titled: “Which Employers Share Rents? A Firm-level Analysis for Japan” written with Kyoji Fukao, Kenta Ikeuchi, and Fabrizio Pompei. They demonstrated that rent-sharing in Japan is higher in companies with higher intensity of intangibles and digitalisation. However, it mainly benefits highly educated employees and hence contributes to wage polarisation. Piotr Lewandowski (IBS) talked about the impact of automation on household income inequality in Europe, a study conducted in the UNTANGLED project with Karina Doorley, Jan Gromadzki, Dora Tuda, and Philippe Van Kerm. They find that robotisation widens wage inequality, but has negligible impact on household disposable income inequality, as risk sharing in households and redistribution by tax-benefit systems cushion the negative effects of automation.

For an overview of the programme click here.

The 25 May meet-up organised by ZSI hosted five presentations:

Francesco Venturini (University of Perugia) presented his paper titled “Unsliceing the Pie: AI Innovation and Labour Share in European Regions.” The study investigated the impact of AI patents on the distribution of income between capital and labour, finding that in regions specialising in AI development the labour share decreases. This supports the notion of a decoupling effect caused by AI. Additionally, Venturini found that more AI patents in the region have a negative impact on the labour share of low-skilled workers. The presentation highlighted that the negative effects of AI are similar to those of other innovations.

Michela Vecchi (Kingston University) presented a paper co-authored with Mary O’Mahony and Catherine Robinson, examining the decline in the wage premium for highly skilled workers in Europe. Their findings indicate that both demand and supply factors contribute to the shrinking of wage premiums. On the demand side, the research shows that the association of technology and high skills has weakened, especially following the financial crisis. Additionally, the presence of intangible assets is found to be negatively correlated with the wage premium for skilled workers. On the supply side, the increasing number of workers with tertiary-level education has pushed down the wages of highly skilled individuals relative to those with lower skills.

Fynn Thjorben Semken (ÖSB Social Innovation) presented a research project titled Health Sensor for Digital Work funded by the Austrian Chamber of Labour. This project aims to examine the effects of digital technologies that companies use to organise work on employee health. The primary objective is to develop a prototype tool that can assist companies in assessing whether health issues experienced by employees are linked to the extensive use of digital technologies in their professional lives. The project also aims to identify solutions to mitigate negative impacts such as digital stress. It involves companies, a tech provider and a consultancy. Final results can be expected in Spring 2024.

Ludivine Martin (LISER) discussed her collaborative research with Kamil Filipek and Thiago Brant, which examines whether current typologies of digital skills are adequate to capture the evolving nature of work and to single out digital skills that are the most sought-after by companies. They analyse online job vacancies from Lightcast (formerly Burning Glass Technologies Europe) for 2021 from France, Germany, Belgium, and Luxembourg.

Stella Wolter (ZSI) presented The Lost Millennials Project, funded by an EEA and Norway Grant which aims to enhance the integration of 25+ NEETs, i.e. people aged from 25 to 29 who are neither in employment, education or training, into the labour market or into learning. One of the ways of providing better support to this group is to exchange and improve the evaluation practices of labour market initiatives targeting this group. Generally, the group of NEETs is found to be composed of varied groups in different countries and structured by gender (women and parents in unpaid care work), disability and other health conditions, the rural/urban divide, (lack of) education, and precarious employment opportunities in their respective labour markets. The project also aims to learn more about the effects of education and/or employment initiatives and to enhance stakeholders’ capacity to carry out impact studies.

The collected slides with further links to the respective projects and outputs are available here.

The next Café will take place on September 21, 2:00-3:30 pm CET.

Mikkel Barslund (KU Leuven) warmly welcomed all participants and provided a synthesis of the results from papers and reports that have been written thus far. The preliminary conclusion from our research demonstrates that digitalisation and robotisation do not seem to harm labour markets and globalisation does not pose a threat to jobs. However, it has become apparent that demographic changes present significant challenges within the three megatrends examined by UNTANGLED.

Next, we delved into the preliminary results of scenario projections, exploring how technological advancements and globalisation influence inequalities, skills, and labour market outcomes. Roberta Capello and Andrea Caragliu (Politecnico di Milano) shared the results of simulating national and regional growth trajectories and labour market outcomes using the MASST model. Michał Burzyński (LISER) presented results based on a different model to stimulate the matching of skills to tasks amid parallel changes in technology, globalisation, and skills.

To ensure that our research findings reach the appropriate audience, we divided into groups and discussed the approach to crafting policy briefs, which will be developed over the next few months. Each session focused on a specific brief, covering topics such as strengthening job creation and improving job quality, upgrading skills and fostering lifelong learning, tackling growing inequalities, supporting migration and labour mobility, as well as inclusive policies.

Lastly, we have set the date for our final conference, which will take place on November 23. This event will serve as a platform to disseminate our findings, engage in fruitful discussions, and collaborate with experts from various fields.

The event brought together 18 participants from 10 partner institutions.

The February 14 meet-up organised by ZSI hosted five presentations:

Karolien Lenaerts from HIVA, KU Leuven talked about a recent UNTANGLED case study (to be published in March 2023), illustrating workplace innovation by means of digital transformation processes at the company level. The case study looked at a testing, inspection and certification company and its journey of internal restructuring that began a few years ago. The top-down introduction of digital inspection and reporting tools, intended to improve both front- and back-office processes, backfired by negatively affecting workers’ autonomy, quality of work and mental wellbeing. The lack of piloting and testing phases, as well as not considering workers’ professionalism and user experience, contributed to these adverse outcomes. The firm appeared to have entered a sunk cost fallacy: after having invested considerably into the technology, it continues this endeavour despite proof of its inadequacy. Hence, the case contains lessons on both the social and business risks of a digitalisation process that does not consider workers’ and users’ views and working practices.

Pelin Özgül from the Research Centre for Education and the Labour Market (ROA) at Maastricht University introduced ai:conomics – a new research project that seeks to develop scientific insights into the impact of AI on jobs, performance, skills demand and worker well-being. The methodology is threefold: using so called “insider econometrics”, or field experiments in companies to gain knowledge from corporate practice; economics; and a transdisciplinary perspective including “researchers, employers, employees, technology-experts, members of the works council and political decision-makers”. The aim of the project is to contribute to a better understanding of societal challenges that emerge with the introduction of AI, and find ways to overcome them.

Ursula Holtgrewe from ZSI – Centre for Social Innovation extended an invitation to a webinar planned for 27 February by the WeLaR project. WeLaR, or “Welfare systems and labour market policies for economic and social resilience in Europe”, is an interdisciplinary research project that investigates the impact of demographic changes, globalisation, digitalisation and climate change on labour markets and welfare states across the continent. For more information on the webinar and the project itself, please visit http://www.projectwelar.eu.

Katrin Sommerfeld from the Centre for European Economic Research (ZEW), who is also a research affiliate at the Institute of Labor Economics (IZA), summed up the results of ZEW Discussion Paper No. 22-069, which studied the demand effect of immigration on local labour markets. The research made use of the fact that asylum-seekers in Germany are banned from working in the first few months after arrival, which allowed “isolating a pure immigration-induced labour demand effect”. The results suggest that hosting refugees generates additional employment for natives: for each additional asylum seeker in a district, 0.4 additional jobs are created. Low-skilled workers and non-refugee migrants, especially women, experience the strongest employment gains. The effects appear to fade away after 2-3 years. One possible interpretation of the findings is that “migrants add to the consumer base and consume a larger share of locally produced goods and services than natives”.

Finally, Fabrizio Pompei from the University of Perugia presented evidence of the impact of industry-level robot exposure on the likelihood of receiving a temporary contract for workers in six EU countries. The research makes use of Peneder’s taxonomy of sectoral technological regimes according to the low or high cumulativeness of knowledge (Peneder, 2010). The results suggest that in low-cumulativeness industries where innovation-related knowledge is less accumulative, robot adoption may increase the share of temporary contracts for high-skilled workers “if the dominant labour reallocation effect is driven by robot adopting companies that need new skills”, while in firms requiring more accumulation of knowledge, increasing robot adoption is related to lower shares of temporary contracts among the higher-skilled.

The collected slides are available here.

The next Café will take place on May 4, 2:00-3:30 pm CET.

The program is available here.