And taxes on automation are flawed, creating net negative impacts for every party involved.

While the arguments in favor of a robot tax may be well-intentioned, robot taxes are a misguided idea that would have negative consequences for firms, their workers, and ultimately the economy. To begin with, the assertion that robots are taking jobs is not well founded. Recent research shows that firms that adopt robots experience more employment growth than those that do not. These firms also appear to be more productive, potentially benefiting consumers, although the gains experienced by the adopting firm may come at the expense of firms that do not adopt. Moreover, defining a “robot” turns out to be non-trivial; depending on this definition, a robot tax may affect some industries more than others, regardless of the impact on human labor. Ultimately, a robot tax would lead to slower adoption of robots, especially in industries such as manufacturing where it may be easier to define a “robot,” and this slower adoption will likely lead to less economic growth. Instead of robot taxes, policymakers who want to help workers displaced by automation should focus on other policies, such as addressing disparities in taxes on capital and labor and easing labor market frictions. Doing so would benefit workers, firms, and the economy more so than would a tax on robots. Firms adopting robots see more employment and better performance Over the past couple of years there have been several firm-level studies on the effects of robot adoption in industrial settings. These papers all find that firms that adopt robots see an increase in employment. For example, a recent paper by Dixon, Hong, and Wu (2021) uses data on robot imports to identify Canadian firms that adopt robots.1 They then compare employment, behavior, and performance between robot-adopting and non-adopting firms. They find that the robot-adopting firms experience a subsequent increase in employment and that the employment increase is predominantly from low-skill workers. As another example, Acemoglu, Lelarge, and Restrepo (2020) find that, among French manufacturing firms, those firms that adopted robots add jobs.2 A similar finding is in a paper by Koch, Manulov, and Smolka (2019), who use firm level data from Spain.3 These studies also find that the firms that adopt robots see an increase in performance (measured as an increase in firm-level total factor productivity or revenue). Interestingly, the studies find that the non-adopting firms in the same industry as the robot adopting firms see decreases in employment. This may be due to reallocation from slower-growing, more poorly-performing firms to faster-growing, better-performing firms. In some cases, the decreases in employment at the non-adopting firms more than outweigh the employment gains at the robot-adopting firms, causing a location- or industry-wide fall in employment (as shown for example in Acemoglu and Restrepo (2020)).4 There have also been papers on robot adoption in service settings. A paper studying the effects of robots on workers in Japanese nursing homes by Eggleston, Lee, and Iizuka (2021) finds that robots complement human labor and reduce labor turnover.5 The physically demanding nature of work in nursing homes can often lead to high turnover, so robots in these settings are intentionally designed to assist with the most physically demanding tasks such as lifting patients out of beds. The paper also highlights an interesting feature of the Japanese setting: that many Japanese prefectures provide subsidies for nursing homes that adopt robots. If indeed robots complement human labor, then subsidies make sense and may help spur adoption of robots in these settings.