Human capital investment and perceived automation risks: Evidence from 16 countries

Abstract:

Robotics and artificial intelligence are transforming jobs and career paths, and equipping workers with the ability to gain new skills has become a strategic policy imperative. Previous studies showed that investment in human capital depends on locus of control, risk preferences and impatience. Yet in a changing world of work, the perceived risk of being replaced by a machine or an algorithm might also affect workers’ decisions to gain new professional skills. Using novel survey data from representative samples of working individuals in 16 countries, this paper shows that fear of automation is positively associated with workers’ intentions to invest in training activities outside their workplace. This effect is robust to controlling for other known behavioural traits. We also show that fear of automation reinforces the effect that internal locus of control exerts on retraining intentions.