Automation, Learning, and Career Dynamics

Afrouzi, Hassan; Blanco, Andres; Drenik, Andres; Hurst, Erik

doi:10.29338/wp2026-06

Working Paper

Automation, Learning, and Career Dynamics

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.

JEL Classification: E23; E24; J24;

https://doi.org/10.29338/wp2026-06