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The automation effect on deindustrialization: the case of Brazil

Petrosiute, Aiste LU (2025) EKHS21 20251
Department of Economic History
Abstract
This thesis investigates the relationship between automation and deindustrialisation in the
context of Brazil, a developing country experiencing significant structural economic changes.
While automation is often associated with productivity growth and economic advancement, its
implications for employment, particularly in emerging economies, remain contested. Drawing
on the Lewis 2.0 framework and Tregenna’s (2011) decomposition model, the study examines
whether the adoption of automation technologies in Brazil's manufacturing sector contributes
to a decline in industrial employment and a shift toward low-productivity service jobs. The
empirical analysis covers the period from 2000 to 2015 and employs two econometric models
to test... (More)
This thesis investigates the relationship between automation and deindustrialisation in the
context of Brazil, a developing country experiencing significant structural economic changes.
While automation is often associated with productivity growth and economic advancement, its
implications for employment, particularly in emerging economies, remain contested. Drawing
on the Lewis 2.0 framework and Tregenna’s (2011) decomposition model, the study examines
whether the adoption of automation technologies in Brazil's manufacturing sector contributes
to a decline in industrial employment and a shift toward low-productivity service jobs. The
empirical analysis covers the period from 2000 to 2015 and employs two econometric models
to test two hypotheses: first, that automation leads to a reduction in manufacturing employment,
and second, that it increases employment in the service sector. A decomposition analysis shows
that the primary driver of declining manufacturing employment is not productivity growth, but
rather a contraction in the sector’s overall size. Regression results further reveal that automation
is unexpectedly associated with higher manufacturing employment, contradicting conventional
assumptions. Meanwhile, no statistically significant relationship is found between automation
and service employment. The findings suggest that automation alone does not explain Brazil’s
deindustrialisation. This study contributes to the limited empirical literature on automation and
premature deindustrialisation in developing countries, offering insights into how technological
change interacts with employment patterns in middle-income economies during the era of
Industry 4.0 (Less)
Please use this url to cite or link to this publication:
author
Petrosiute, Aiste LU
supervisor
organization
course
EKHS21 20251
year
type
H2 - Master's Degree (Two Years)
subject
language
English
id
9203339
date added to LUP
2025-08-25 08:38:40
date last changed
2025-08-25 08:38:40
@misc{9203339,
  abstract     = {{This thesis investigates the relationship between automation and deindustrialisation in the
context of Brazil, a developing country experiencing significant structural economic changes.
While automation is often associated with productivity growth and economic advancement, its
implications for employment, particularly in emerging economies, remain contested. Drawing
on the Lewis 2.0 framework and Tregenna’s (2011) decomposition model, the study examines
whether the adoption of automation technologies in Brazil's manufacturing sector contributes
to a decline in industrial employment and a shift toward low-productivity service jobs. The
empirical analysis covers the period from 2000 to 2015 and employs two econometric models
to test two hypotheses: first, that automation leads to a reduction in manufacturing employment,
and second, that it increases employment in the service sector. A decomposition analysis shows
that the primary driver of declining manufacturing employment is not productivity growth, but
rather a contraction in the sector’s overall size. Regression results further reveal that automation
is unexpectedly associated with higher manufacturing employment, contradicting conventional
assumptions. Meanwhile, no statistically significant relationship is found between automation
and service employment. The findings suggest that automation alone does not explain Brazil’s
deindustrialisation. This study contributes to the limited empirical literature on automation and
premature deindustrialisation in developing countries, offering insights into how technological
change interacts with employment patterns in middle-income economies during the era of
Industry 4.0}},
  author       = {{Petrosiute, Aiste}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The automation effect on deindustrialization: the case of Brazil}},
  year         = {{2025}},
}