By Kun Lee, Ludivine Martin & Thuc-Uyen Nguyen-Thi

Despite the extensive literature on the labour market impacts of technological change, workers’ behavioural adaptation to augmented technological risks remains relatively underexplored. In this study, we investigate workers’ perceptions of future risks posed by AI and advanced technologies and how these perceptions are causally linked with their precautionary saving behaviour. Using a novel survey of workers in Luxembourg – a country characterised by rapid technological change and dynamic labour markets – we combine descriptive analyses with instrumental variable strategies to examine the relationship between perceived technological risks and precautionary savings, measured by contributions to voluntary pension plans. Our descriptive results reveal considerable socio-economic differences in workers’ perceptions of job and task replacement risks by gender, immigration status, education, skill level and sector. We then show that perceived technological risks are associated with higher savings, and the positive effects are primarily driven by those typically employed in less stable positions. Overall, our findings reveal how technological uncertainty can reshape economic behaviour, suggesting that workers may increasingly resort to private welfare resources in response to future uncertainty and heightened labour market risks.

Source SSRN