Abstract: This paper examines the differences in the adjustments of employment and wages to four automation
technologies—i.e. robots, communication technology, information technology, and software/database—across 227 regions
in 22 European countries from 1995 to 2017. By constructing a measure of technology penetration, we estimate how automation
technologies transform regional labor markets and how workers are reallocated across sectors. Based on their characteristics,
we classify regions into seven clusters. We find that labor market adjustments to automation technologies differ according to:
i) the technology which penetrates; ii) the sector of penetration; iii) the sectoral composition of the region; and iv) the
productivity of its labor force. These adjustments are largely the result of the reallocation of low-paid workers across sectors.