Replaceable but Employed: Automation and the Meaning of Work

Joshua Gans

No 35559, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Can automation harm workers without replacing them? We study jobs in which workers value both producing useful output and knowing that the output depends on their own contribution. A credible machine alternative can weaken that second source of meaning even when the firm retains the worker. Our model shows that this loss raises compensation when wages adjust fully; when they adjust only partly, workers bear some of the loss themselves. It can also make automation more likely. An external developer may profit by publicly demonstrating a machine before licensing it, because the demonstration lowers the value of the human alternative. This "meaning externality" can create demand for the machine and make profitable development socially harmful. Better technical quality and greater public salience have different effects: quality improves output, while salience alone weakens human work. Automation can, therefore, reduce the value of work before it eliminates jobs.

JEL-codes: D62 D91 J24 J31 J32 O33 (search for similar items in EconPapers)
Date: 2026-07
Note: PR
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