IDEAS home Printed from https://ideas.repec.org/p/wiw/wus005/91593450.html

When Should Robots Be Subsidized?

Author

Listed:
  • Chingri, Subhrasil
  • Mondal, Debasis
  • Prettner, Klaus

Abstract

This paper studies optimal robot taxation in a static model with routine and non-routine workers. Robots substitute for routine workers and complement non-routine workers. In addition, robots are produced in a monopolistic sector that charges a markup over marginal cost. In the absence of monopoly power, the optimal robot tax rate is zero. When robot producers have monopoly power, the optimal policy corrects the markup distortion by aligning the effective robot price with marginal cost, conditional on the labor supply induced by the income tax system. The wage premium rises with the expansion of the tasks that robots can perform and declines with higher robot production costs. The results clarify the conditions under which robot taxation serves as a corrective instrument.

Suggested Citation

  • Chingri, Subhrasil & Mondal, Debasis & Prettner, Klaus, 2026. "When Should Robots Be Subsidized?," Department of Economics Working Paper Series 399, WU Vienna University of Economics and Business.
    • Handle: RePEc:wiw:wus005:91593450
    as

    Download full text from publisher

    File URL: https://research.wu.ac.at/en/publications/2cca6178-6a77-4166-ae35-5a358e5842c7
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wus005:91593450. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: WU Library (email available below). General contact details of provider: https://research.wu.ac.at/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.