Work

How scary is the risk of automation? Evidence from a large-scale survey experiment

Year: 2025

Type: article

Abstract: Technological advancements have always shaped labor markets; however, emerging AI innovations like ChatGPT are now putting occupations previously considered "safe" from technological substitution at significant risk of automation. This study examines individuals' willingness to pay to reduce automation risk, using a discrete-choice experiment conducted with nearly 6000 participants. Results reveal that respondents accept a salary reduction of almost 20 % of the Swiss median annual gross wage to reduce their automation risk by 10 percentage points or, conversely, demand a 20 % risk premium to accept an equivalent increase in automation risk. Interestingly, the study finds that WTP for risk reduction increases with higher baseline automation risk levels, contrary to patterns observed in other contexts. While preferences are generally homogeneous, differences exist between demographic groups. Men, younger and risk-tolerant individuals, and those with higher education show lower willingness to pay for reduced automation risk. By having respondents express preferences for hypothetical children, the study also explores potential gender biases, finding no significant differences in willingness to pay for reduced automation risk, educational degrees, hierarchical position, or wage based on the child's gender.

Source: Journal of Economic Behavior & Organization

DOI: 10.1016/j.jebo.2025.107034

Authors: Maria A. Cattaneo, Christian Gschwendt, Stefan C. Wolter

Institutions: University of Bern, IZA - Institute of Labor Economics

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,180