DP17438 Preparing for the (Non-Existent?) Future of Work
We analyze how to set up institutions that future-proof our society for a scenario of ever-more-intelligent autonomous machines that substitute for human labor and drive down wages. We lay out three concerns arising from such a scenario and evaluate recent predictions and objections to these concerns. Then we analyze how to allocate work and income if these concerns start to materialize. As the income produced by autonomous machines rises and the value of labor declines, we find that it is optimal to phase out work, beginning with workers who have low labor productivity and job satisfaction, since they have comparative advantage in enjoying leisure. This is in stark contrast to welfare systems that force individuals with low labor productivity to work. A basic income, whether from sufficiently well-distributed capital ownership or as a benefit, will become necessary to avoid mass misery when there are significant wage declines. Recipients could still engage in work for its own sake if they enjoy work amenities such as structure, purpose and meaning. If work gives rise to positive externalities such as social connections or political stability, or if individuals undervalue the benefits of work because of internalities, then there is a role for public policy to encourage work. However, we conjecture that in the long run, it would be more desirable for society to develop alternative ways of providing these benefits.