Robots, labor markets, and universal basic income

Automation is a big concern in modern societies in view of its widespread impact on many socioeconomic issues including income, jobs, and productivity. While previous studies have concentrated on determining the effects on jobs and salaries, our aim is to understand how automation affects productivity, and how some policies, such as taxes on robots or universal basic income, moderate or aggravate those effects. To this end, we have designed an experiment where workers make productive effort decisions, and managers can choose between workers and robots to do these tasks. In our baseline treatment, we measure the effort made by workers who may be replaced by robots, and also elicit firm replacement decisions. Subsequently, we carry out treatments in which workers have a universal basic income of about a fifth of the workers’ median wages, or where there is a tax levy on firms who replace workers by robots. We complete the picture of the impact of automation by looking into the coexistence of workers and robots with part-time jobs. We find that the threat of a robot substitution does not affect the amount of effort exerted by workers. Also, neither universal basic income nor a tax on robots decrease workers’ effort. We observe that the robot substitution tax reduces the probability of worker substitution. Finally, workers that benefit from managerial decisions to not substitute them by more productive robots do not increase their effort level. Our conclusions shed light on the interplay of policy and workers behavior under pervasive automation.