Automation, Learning, and Career Dynamics

Hassan Afrouzi, Andres Blanco, Andres Drenik () and Erik Hurst
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Andres Drenik: https://liberalarts.utexas.edu/economics/faculty/apd2246

No 2026-6, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: We study how an automating technology affects career dynamics, human capital, and welfare in an economy where workers acquire skill through the tasks they perform. In a continuous-time general equilibrium model, learning-by-doing is determined jointly with the share of tasks automated, the frontier of tasks managers maintain, and the worker-to-manager career transition. Economies with high learning capacity admit pairs of stationary equilibria strictly ranked by the aggregate learning rate. Cheaper technology has opposite effects across the two: in the high-learning equilibrium, it raises welfare through the learning channel itself; in the low-learning equilibrium, it tips the economy into a human-capital trap. The planner's first-best combines a tax on automation profits with a subsidy on frontier maintenance expenditures at a common rate.

Keywords: human capital; learning-by-doing; automation; AI (search for similar items in EconPapers)
JEL-codes: E23 E24 J24 (search for similar items in EconPapers)
Pages: 59
Date: 2026-05-14
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DOI: 10.29338/wp2026-06

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