Abstract ：
To examine the effects of a capital-use tax and automation subsidy on the proportion of automated industries and the inequality between workers and capitalists, we formulate a Schumpeterian growth model with automation, innovation, and human capital accumulation. We analytically show that a higher capital-use tax drives down the wage rate and stimulates automation on the balanced growth path, whereas a reduction in automation subsidies lowers the wage rate but inhibits automation. Moreover, we conduct a quantitative analysis demonstrating that policies that inhibit automation do indeed reduce wages; however, they can nevertheless address the disparity between workers and capitalists.

Keywords：Automation; Human capital; Inequality; Schumpeterian growth
JEL Classification: E20; O31; O38