Yesterday, I was digging into the Guaranteed Basic Income, today, thanks to this post by John Verdon, I’m looking at insurance as a possible route to dealing with technological unemployment. This whole article is worth reading, but I’ll call out this part in particular:
“It also, to me, helps convey the lifetime nature of the problem. People go through a life cycle. Early in the life cycle they train themselves into some particular occupation. Later in life, they very rarely undertake retraining. And they rise and fall with that occupation.”
“What I thought the most important to do would be to develop measures of occupational risk and to write insurance policies against risks to the occupation, and that eliminates moral hazard because a person can’t do anything about the rise and fall of the occupation.”
“So in order to make that happen we have to develop a rather different kind of insurance industry. This has never been done, and it requires better measurement of occupational incomes. We have to measure risks before we can insure them. And we need to develop historical indexes of occupational incomes that are done properly so that we have some sense of history about how these things evolve. That will help us design insurance policies.”
One of the difficulties, of course, is determining risks in newly burgeoning job types. Still, it’s an interesting idea.
Originally shared by John Verdon
The rapid advance of machine learning presents an economic paradox: productivity is rising, but employment may not.