Arbeitspapier

Automation with heterogeneous agents: The effect on consumption inequality

In this paper, I study technological change as a candidate for the observed increase in consumption inequality in the United States. I build an incomplete market model with educational choice combined with a task-based model on the production side. I consider two channels through which technology affects inequality: the skill that an agent can supply in the labor market and the level of capital she owns. In a quantitative analysis, I show that (i) the model replicates the increase in consumption inequality between 1981 and 2008 in the US (ii) educational choice and the return to wealth are quantitatively important in explaining the increase in consumption inequality.

Language
Englisch

Bibliographic citation
Series: IWH Discussion Papers ; No. 28/2022

Classification
Wirtschaft
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Labor Demand
Human Capital; Skills; Occupational Choice; Labor Productivity
Industrialization; Manufacturing and Service Industries; Choice of Technology
Innovation and Invention: Processes and Incentives
Technological Change: Choices and Consequences; Diffusion Processes
Subject
automation
factor shares
inequality
productivity
tasks
technological change

Event
Geistige Schöpfung
(who)
Santini, Tommaso
Event
Veröffentlichung
(who)
Halle Institute for Economic Research (IWH)
(where)
Halle (Saale)
(when)
2022

Handle
URN
urn:nbn:de:gbv:3:2-923264
Last update
20.09.2024, 8:21 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Santini, Tommaso
  • Halle Institute for Economic Research (IWH)

Time of origin

  • 2022

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