Effects of Job Automation on Informality Rates and Wages in Mexico
Owen Eli Ceballos Mina
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Conceptualization
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Data curation
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Formal analysis
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Funding acquisition
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Methodology
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Supervisión
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Writing - original draft
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Writing - review and editing
Humberto Guadarrama Gómez
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Abstract
This article examines the effects of automation on informality and wages in Mexico, considering education level as a mediating mechanism. Data from the first quarter of 2025 of the National Survey of Occupation and Employment and the methodology proposed by Frey and Osborne (2017) are used to estimate instrumental variable models (2SLS-IV) and structural equation models (SEM). Robust evidence is found that a higher probability of automation increases the informality rate and reduces both formal and informal wages, with a greater impact on occupations requiring lower levels of education. The SEM models reveal significant indirect effects through education, particularly on informality and informal income. The results suggest a substitution effect of labor by capital, partially mitigated by education. It is concluded that automation may deepen labor segmentation if not accompanied by public policies promoting reskilling, occupational mobility, and educational strengthening.
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