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

Emanuela Carbonara, Chiara N. Focacci and Enrico Santarelli

Economics of Innovation and New Technology, 2024, vol. 33, issue 8, 1145-1158

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.

Date: 2024
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DOI: 10.1080/10438599.2023.2293031

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