Moll, Benjamin;
Rachel, Lukasz;
Restrepo, Pascual;
(2022)
Uneven Growth: Automation's Impact on Income and Wealth Inequality.
Econometrica
, 90
(6)
pp. 2645-2683.
10.3982/ecta19417.
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Abstract
The benefits of new technologies accrue not only to high‐skilled labor but also to owners of capital in the form of higher capital incomes. This increases inequality. To make this argument, we develop a tractable theory that links technology to the distribution of income and wealth—and not just that of wages—and use it to study the distributional effects of automation. We isolate a new theoretical mechanism: automation increases inequality by raising returns to wealth. The flip side of such return movements is that automation can lead to stagnant wages and, therefore, stagnant incomes at the bottom of the distribution. We use a multiasset model extension to confront differing empirical trends in returns to productive and safe assets and show that the relevant return measures have increased over time. Automation can account for part of the observed trends in income and wealth inequality.
| Type: | Article |
|---|---|
| Title: | Uneven Growth: Automation's Impact on Income and Wealth Inequality |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.3982/ecta19417 |
| Publisher version: | https://doi.org/10.3982/ecta19417 |
| Language: | English |
| Additional information: | This version is the version of record. For information on re-use, please refer to the publisher’s terms and conditions. |
| Keywords: | Inequality, wealth, capital, returns, wages, labor share, technology, automation. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL SLASH UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10160452 |
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