Preparing for the (Non-Existent?) Future of Work

Anton Korinek and Megan Juelfs

No 30172, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper considers the labor market and distributional implications of a scenario of ever-more-intelligent autonomous machines that substitute for human labor and drive down wages. We lay out three concerns arising from such a scenario and evaluate recent predictions and objections to these concerns. Then we analyze how a utilitarian social planner would allocate work and income if these concerns start to materialize. As the income produced by autonomous machines rises and the value of labor declines, a utilitarian planner finds it optimal to phase out work, beginning with workers who have low labor productivity and job satisfaction, since they have comparative advantage in enjoying leisure. This is in stark contrast to welfare systems that force individuals with low labor productivity to work. If there are significant wage declines, avoiding mass misery will require other ways of distributing income than labor markets, whether via sufficiently well-distributed capital ownership or via benefits. Recipients could still engage in work for its own sake if they enjoy work amenities such as structure, purpose and meaning. If work gives rise to positive externalities such as social connections or political stability, or if individuals undervalue the benefits of work because of internalities, then a social planner would incentivize work. However, in the long run, the planner might be able to achieve a higher level of social welfare by adopting alternative ways of providing these benefits.

JEL-codes: E6 J2 O3 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-lma
Note: DAE EFG LS PE PR
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Working Paper: Preparing for the (Non-Existent?) Future of Work (2022)
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