You have been terminated: robots, work, and taxation

Area of Science:

• Economics
• Economic Modeling
• Technological Change

Background:

• The increasing integration of robotics in production processes presents a significant economic shift.
• Understanding the long-term economic implications of automation is crucial for policy-making.

Purpose of the Study:

• To investigate the inevitability of a robotized economy under strict assumptions.
• To analyze the potential of economic policies, specifically robot taxation, to alter the trajectory of automation.
• To examine the structural changes in economic growth models as economies become fully robotized.

Main Methods:

• Development of a three-sector overlapping generations (OLG) model.
• Modeling of a homogeneous output good produced by traditional (labor and capital) and modern (robot) technologies.
• Analysis of robots and human labor as perfect substitutes.

Main Results:

• The transition to a robotized economy is found to be inevitable.
• Increased taxation on robots and redistribution of revenues can decelerate the automation process.
• The economy shifts from an exogenous growth model (Total Factor Productivity-based) to an endogenous growth model.

Conclusions:

• Economic policies, while unable to prevent automation, can influence its pace.
• Full robotization leads to a fundamental change in the drivers of economic growth, favoring endogenous factors.