THG News · Research

NBER Study Links Minimum Wage Increases to Faster Industrial Robot Adoption

· Updated

Higher minimum wages push U.S. manufacturers toward industrial robots, according to a National Bureau of Economic Research working paper released in February 2026. The paper, "Minimum Wages and Rise of the Robots" (NBER Working Paper 34895), was written by Erik Brynjolfsson, J. Frank Li, Javier Miranda, Robert Seamans and Andrew J. Wang, according to NBER.

The authors are affiliated with Stanford University, the University of British Columbia, the Halle Institute for Economic Research and NYU Stern School of Business, according to NYU Stern.

What the researchers measured

The study combines state-level measures of robot exposure with plant-level data on industrial robot imports linked to U.S. Census microdata covering 1992 to 2021, according to the paper's abstract. The authors' preferred method exploits discontinuities at state borders, comparing otherwise similar firms that face different wage floors. That design is intended to separate the effect of the minimum wage from other regional differences, such as local industry mix or demand conditions.

"Across specifications, a 10 percent increase in the minimum wage increases robot adoption by roughly 8 percent relative to the mean," the authors wrote in the abstract. NYU Stern described the result as a 10% minimum wage increase raising the likelihood of robot adoption by about 8%.

How the authors frame the policy question

In a research summary published on March 13, 2026, NYU Stern said the findings suggest that wage policy affects firms' long-term capital investment decisions, not only immediate earnings, and that manufacturing employment structures may change faster than policymakers expect.

"Our research does not imply that minimum wages are inherently harmful," Seamans said in the NYU Stern summary. He added that the results highlight the importance of complementary policies, such as worker retraining, skill development and transition support, to help workers adapt as firms modernize, according to NYU Stern.

Limits of the evidence

The paper's abstract reports effects on whether manufacturing firms adopt robots. It does not report a net count of jobs created or lost, and its data end in 2021, according to the abstract, before the current wave of AI-enabled and humanoid robots reached factories. The study also covers U.S. manufacturers only, so its results may not carry over to logistics, retail or service settings, or to countries with different wage-setting systems.

For automation planners, the work adds causal evidence to a long-standing question: labor costs shape when companies decide to automate. The border comparison gives the result more weight than a simple correlation between wages and robot use, because neighboring firms on either side of a state line share many economic conditions but face different minimum wages. Economists have previously studied the effect of robots on employment and wages; this paper looks at the reverse direction, how labor policy affects the decision to buy robots in the first place.

Sources