Dear colleagues,
The Department of Economics cordially invites you to the WU
Research Seminar in Economics on Wednesday, May
6th, with Johan Gustafsson (https://www.umu.se/en/staff/johan-a-gustafsson/) presenting:
"Should robots pay for our pensions?".
Abstract: The thesis of this paper is that increased automation, through the continued adoption of industrial robots and the rapid proliferation of artificial intelligence, may challenge the fiscal sustainability of public
pension systems. We develop a general equilibrium overlapping generations model with two types of automation capital, substituting for routine and cognitive labor respectively, and ask whether it is welfare-improving to shift pension funding from labor income
taxes to taxes on automation capital income. Analytically, we show that the payroll tax rate required to maintain a given benefit level depends on the product of the labor task share and total output, that a revenue-neutral tax shift toward automation capital
unambiguously increases savings and capital accumulation, and that labor supply policies become increasingly ineffective for generating pension revenue as automation deepens. Calibrating the model to Germany, we find that shifting pension funding toward automation
capital is always welfare-improving, with consumption-equivalent welfare gains ranging from 3.8 percent under current conditions to over 8 percent when population aging and increased automation coincide. The optimal policy imposes automation capital taxes
of 24 to 29 percent while substantially reducing the payroll tax, benefits low-skill workers disproportionately, and can be implemented as a simple uniform tax across automation types with negligible welfare losses relative to a fully differentiated instrument.
With best regards,
Harald Oberhofer
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Univ.-Prof. Dr. Harald Oberhofer
Department of Economics
WU Vienna University of Economics and Business
Phone: +43/1/31336-4984
Email: harald.oberhofer@wu.ac.at
https://www.wu.ac.at/en/economics/people/oberhofer-h
Austrian Institute of Economic Research (WIFO)
Phone: +43/1/7982601-468
Email: harald.oberhofer@wifo.ac.at
http://www.wifo.ac.at/harald_oberhofer