The Political Economy of Automation: Occupational Automatability and Preferences for Redistribution

Abstract

Although the importance of technological change for increasing prosperity is undisputed and economists typically deem it unlikely that labor-saving technology causes long-term employment 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 that are more at risk of losing their job to automation have stronger preferences for government redistribution. Analysis of cross-national individual-level survey data from three different sources confirms the effect of occupational automation risk on redistribution preferences. The same effect is found when considering indirect exposure to automation risk through the occupation of one’s spouse or partner and using the automatability of individuals’ own occupation as a generic control variable. In addition, the effect is not limited to the preference for redistribution in general but extends to a preference for a specific policy with redistributive consequences, namely the preference for government support of declining industries.