Immiserizing Automation

Vladimir Asriyan, Hugo Reichardt and Sandro Shelegia

No 21872, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Early-career jobs often serve as stepping stones to more productive occupations later in life. Automating such jobs may disrupt skill accumulation. We study this possibility in an overlapping-generations economy with career ladders. Our main result is that automation of junior tasks can be immiserizing: when its cost savings are small, automation lowers long-run output. Immiseration occurs because junior automation shifts earnings to later in life. This shift lowers the present value of experience-intensive careers, so that fewer workers pursue them, and the supply of experienced workers falls. As the transition to the new steady state is Pareto efficient, any policy that averts immiseration hurts at least some workers. Incumbent experienced workers, for instance, benefit from higher senior wages without having suffered lower wages as juniors. In the context of U.S. robot automation, we provide empirical support for the theory's key predictions and explore its aggregate implications.

JEL-codes: D91 E24 J23 J24 O33 (search for similar items in EconPapers)
Date: 2026-08
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