New technologies drive productivity growth, yet the distribution of gains may be unequal. We study how labor market institutions – specifically shop-floor worker representation – mediate the impact of automation. Combining German individual-level administrative records with plant-level data...

Works councils reduce job separations during automation events, especially when firms can easily replace incumbent workers. Among workers who are most prone to automation, works councils prevent wage and earnings losses when firms adopt robots. Works councils prevent earnings inequality through...