Automation, Savings, and Breakaway to a Post-Labour Economy

Omer Edhan and Ziv Hellman

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Abstract: When does automation become an economically self-sustaining process? We define \emph{automation breakaway} as the condition under which saving generated by physical capital and artificial labour is sufficient to finance continued automation. Artificial labour is labour-like in production but capital-like in accumulation, creating an income base that can support further investment. We characterise breakaway and its dynamic viability, showing that productivity and factor-income composition provide distinct financing channels. Artificial-labour accumulation strengthens the saving base supporting breakaway, while its effect on labour income changes sign with substitutability with human labour. Near full automation, aggregate labour income can contract through fewer human-filled jobs while average labour income in surviving jobs remains positive or rises. Optimal reliance on worker finance can begin to decline while it still provides a positive current net benefit.

Date: 2026-10
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