This paper investigates the causal impact of the adoption of new digital technologies, namely advanced automation and big data, on employment outcomes in Italy between 2015 and 2019. Exploiting firm-level data on technology adoption from the 2018 ISTAT Permanent Census of Enterprises aggregated at the provincemacrosector level, we estimate the effects on the local employment shares of all occupational groups at the 2-digit level. We employ an instrumental variable strategy exploiting the global development of knowledge and local variation in absorptive capacity. Our findings reveal significant heterogeneity in the impact, both across technologies and occupations, leading to substantial labour reallocation.

JEL Classification Codes: J23, J24, M51, O33, R19.

Keywords: Digital Technology, Labour Markets, Employment Structure, Regional Economics