Econometrica

Journal Of The Econometric Society

An International Society for the Advancement of Economic
Theory in its Relation to Statistics and Mathematics

Edited by: Guido W. Imbens • Print ISSN: 0012-9682 • Online ISSN: 1468-0262

Econometrica: Nov, 2022, Volume 90, Issue 6

Uneven Growth: Automation's Impact on Income and Wealth Inequality

https://doi.org/10.3982/ECTA19417
p. 2645-2683

Benjamin Moll, Lukasz Rachel, Pascual Restrepo

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.


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Supplemental Material

Supplement to "Uneven Growth: Automation’s Impact on Income and Wealth Inequality"

Benjamin Moll, Lukasz Rachel, and Pascual Restrepo

This zip file contains the replication files for the manuscript.  It also contains an additional appendix for the manuscript.

Supplement to "Uneven Growth: Automation’s Impact on Income and Wealth Inequality"

Benjamin Moll, Lukasz Rachel, and Pascual Restrepo

This online appendix contains material not found within the manuscript.