TY - UNPB
T1 - You Have Been Terminated: Robot Taxation and the Welfare State
AU - Akar, Gizem
AU - Casalone, Giorgia
AU - Zagler, Martin
PY - 2022
Y1 - 2022
N2 - We present a three sector OLG model with a homogenous output good that is produced with traditional or robot technology. The traditional sector produces with labor and capital, whereas the modern sector employs robots instead of labor. We find that little can prevent the ascent of a modern economy. In particular, whilst robots are perfect substitutes to labor in our model, it is only the ratio of robot to capital taxes that can influence the speed of transition. The robotics sector produces robots using the homogeneous output good. We find that wages fall with a relative increase in productivity in the modern sector and a decrease in market power of robot suppliers. Falling wages imply that consumption will fall through generations, and a utilitarian government would feel inclined to intervene. We present several welfare policies, from wage subsidies, unemployment benefits, pensions, to a universal basic income. We also show under which conditions, as the economy becomes fully roboterized, it will switch from an exogenous growth model based on TFP to an endogenous growth model due to constant returns with respect to reproducible factors of production.
AB - We present a three sector OLG model with a homogenous output good that is produced with traditional or robot technology. The traditional sector produces with labor and capital, whereas the modern sector employs robots instead of labor. We find that little can prevent the ascent of a modern economy. In particular, whilst robots are perfect substitutes to labor in our model, it is only the ratio of robot to capital taxes that can influence the speed of transition. The robotics sector produces robots using the homogeneous output good. We find that wages fall with a relative increase in productivity in the modern sector and a decrease in market power of robot suppliers. Falling wages imply that consumption will fall through generations, and a utilitarian government would feel inclined to intervene. We present several welfare policies, from wage subsidies, unemployment benefits, pensions, to a universal basic income. We also show under which conditions, as the economy becomes fully roboterized, it will switch from an exogenous growth model based on TFP to an endogenous growth model due to constant returns with respect to reproducible factors of production.
U2 - 10.2139/ssrn.4040134
DO - 10.2139/ssrn.4040134
M3 - WU Working Paper
T3 - WU International Taxation Research Paper Series
BT - You Have Been Terminated: Robot Taxation and the Welfare State
PB - WU Vienna University of Economics and Business
CY - Vienna
ER -