Technological Change as a Determinant of Redistribution Preferences

Date: 18 June 2015

Technological change is widely considered to be a key driver of the economic and occupational structure of affluent countries. Current advances in information technology have led to significant substitution of routine work by capital, whilst occupations with abstract or interpersonal manual task structures are complemented or unaffected. We develop a simple theoretical framework in which individuals in routine task intensive occupations prefer public insurance against the increased risk of future income loss resulting from automation. Moreover, we contend that this relation will be stronger for persons employed in sectors particularly exposed to technological change, and for richer individuals who have more to lose from automation. In this way we combine occupational and sectoral elements of risk exposure, whilst we revisit the role of income in shaping redistribution preferences.

Stefan Thewissen David Rueda

Employment, Equity and Growth

Technological Change as a Determinant of Redistribution Preferences

Type: working-paper

Thewissen, S. and Rueda, D. (2015) ‘Technological change as a determinant of redistribution preferences'. Department of Economics Research Memorandum. University of Leiden

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