a column by Ravi Kanbur for VOX: CEPR’s Policy Portal
Technological innovation is broadly accepted as a driving force behind diverging wage trends in the last three decades.
If this is set to continue, policymakers must choose how to respond to the ensuing income inequality.
This column assesses two established policy response ideas – state-sponsored formal education, and tax and transfer mechanisms – and postulates a third, namely, that the pace and distributional effects of technological change should themselves be policy goals.
A policy intervention that would make innovation more labour intensive would be the most powerful response of all.
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