How complementarities between automation and organisational innovation shape the wages of a firm's employees: The role of social skills
Anastasiia Pustovalova, Priit Vahter (Tartu Ülikool)
Kolmapäeval, 7. oktoobril 2026 kell 14.00 Narva mnt 18-1024 ja Zoom
Technological and organisational innovations are often viewed as complementary in improving firm performance. Much less is known, however, about whether employees share the gains associated with these complementarities. This paper investigates whether expected complementarities between automation and organisational innovation are reflected in employee wages and examines the role of employees' social skills in shaping these outcomes. Using linked employer–employee data for Estonian manufacturing firms, combining firm-level information on automation investments, organisational innovation and ESCO-based measures of social skills, we estimate wage equations using firm fixed effects and coarsened exact matching, and an event study approach. We find no evidence that the joint adoption of automation and organisational innovation generates broad complementarity effects in terms of wage gains. Instead, wage effects are highly heterogeneous. The strongest evidence of wage gains associated with joint adoption of automation and organisational innovation emerges among higher-educated employees working in occupations that require strong social skills and in firms engaged in persistent automation investments.
