Labor Market Polarization, Earnings Inequality and Optimal Tax Progressivity: A Theoretical and Empirical Analysis

• Project/Area Number: 24K04909
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Review Section: Basic Section 07050:Public economics and labor economics-related
• Research Institution: National Graduate Institute for Policy Studies
• Principal Investigator: Hsu Minchung 政策研究大学院大学, 政策研究科, 教授 (20467062)
• Project Period (FY): 2024-04-01 – 2027-03-31
• Project Status: Granted (Fiscal Year 2024)
• Budget Amount: ¥4,680,000 (Direct Cost: ¥3,600,000、Indirect Cost: ¥1,080,000); Fiscal Year 2026: ¥1,040,000 (Direct Cost: ¥800,000、Indirect Cost: ¥240,000); Fiscal Year 2025: ¥1,430,000 (Direct Cost: ¥1,100,000、Indirect Cost: ¥330,000); Fiscal Year 2024: ¥2,210,000 (Direct Cost: ¥1,700,000、Indirect Cost: ¥510,000)
• Keywords: Labor Polarization / Earnings Inequality / Tax Progressivity

Outline of Research at the Start

This project aims to study labor market polarization when computer capital accumulates and replaces routine jobs. We will develop a theoretical model based on Autor and Dorn's framework to address labor market polarization when automation advances and replaces routine jobs. In addition, we will investigate optimal taxation in response to automation and corresponding labor market polarization. Finally, the project will also conduct a cross-country empirical analysis to test the phenomenon of polarization in other countries.