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Mitigating the labor displacing effects of automation through a robot tax: evidence from a survey experiment

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  • Emanuela Carbonara
  • Chiara N. Focacci
  • Enrico Santarelli

Abstract

We examine how taxation might influence the relationship between automation and employment dynamics. The results obtained through a survey experiment with 2,000 entrepreneurs residing in the U.S. show that the implementation of a robot tax leads to a significant decrease in the inclination of entrepreneurs to reduce workforce levels. Conversely, an equal but negative robot tax, functioning as a reward for automation, motivates entrepreneurs to downsize their workforce. Nevertheless, the impact of the former outweighs that of the latter. Among participants who place higher value on automation we observe a 0.174 increase in the log-odds of reducing the workforce and a 0.312 decrease in the log-odds of reducing automation equipment. These changes are statistically significant at the 1% level. With respect to possible gender effects, male entrepreneurs are found to have a greater likelihood of firing employees, regardless of the treatment.

Suggested Citation

  • Emanuela Carbonara & Chiara N. Focacci & Enrico Santarelli, 2024. "Mitigating the labor displacing effects of automation through a robot tax: evidence from a survey experiment," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 33(8), pages 1145-1158, November.
  • Handle: RePEc:taf:ecinnt:v:33:y:2024:i:8:p:1145-1158
    DOI: 10.1080/10438599.2023.2293031
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