Date and Time
Economics Seminar- Özlem Kına
This paper provides a general equilibrium model that distinguishes between low-and high-skill automation and incorporates the two types of automation into a quantitative optimal taxation framework. Modelling the two types of automation is important as both are empirically relevant, and each has a different impact on wages of workers with different skill types. Low-skill automation increases wage inequality as it creates a downward pressure on low-skill wages, whereas high-skill automation tends to lower high-skill wages, hence it has the opposite effect on wage inequality. Results suggest that it is optimal to distort automation adoption in order to affect relative wages to provide redistribution.
Özlem Kına-University of Edinburgh