The complementarity between automation and flexible labor contracts

Travero, Silvio; Vatiero, Massimiliano; Zaninotto, Enrico

doi:10.1017/s1744137425000104

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Journal article

The complementarity between automation and flexible labor contracts : firm-level evidence from Italy

Travero, Silvio Department of Law and of Political, Economic and Social Science, University of Eastern Piedmont, Alessandria, Italy
Vatiero, Massimiliano ORCID Istituto di diritto (IDUSI), Facoltà di scienze economiche, Università della Svizzera italiana, Svizzera - Department of Economics and Management, University of Trento, Italy
Zaninotto, Enrico Department of Economics and Management, University of Trento, Italy - Fondazione Bruno Kessler-IRVAPP, Trento, Italy

2025

Published in:

Journal of Institutional Economics. - 2025, vol. 21, no. e15, p. 1-17

English This study examines the association between firm-level investments in automation technologies and employment outcomes, drawing on a panel dataset of approximately 10,450 Italian firms. We focus on the proliferation of non-standard labour contracts introduced by labour market reforms in the 2000s, which facilitated external labour flexibility. Our findings reveal a positive relationship between automation investments and the adoption of these flexible labour arrangements. Guided by a conceptual framework, we interpret this result as evidence of complementarity between automation technologies – viewed as flexible capital – and non-standard contractual arrangements – viewed as flexible labour. This complementarity is essential for enhancing operational flexibility, a critical driver of firm performance in competitive market environments. From a policy perspective, our analysis highlights the importance of measures that protect labour without undermining the efficiency gains enabled by automation.

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