Automatability of Work and Preferences for Redistribution

Abstract

Although the importance of technological change for increasing prosperity is undisputed and economists typically deem it unlikely that labour-saving technology causes long-term employment or income losses, people’s anxiety about automation and its distributive consequences can be an important shaper of economic and social policies. This paper considers the political economy of automation, proposing that individuals in occupations more at risk of job loss due to automation have stronger preferences for government redistribution. I analyse individual-level cross-national data from the European Social Survey and other sources, covering up to 32 countries and more than 170,000 individuals. I find a robust positive association between occupational automation risk and preferences for redistribution. As long as the conditional (mean) independence assumption is satisfied, my estimates suggest that a one standard deviation increase in automatability increases preferences for redistribution with roughly 0.05 standard deviations, which is comparable to the difference in preferences for redistribution between women and men.