Automation, AI, and the Intergenerational Transmission of Knowledge

Recent advances in Artificial Intelligence (AI) have sparked expectations of unprecedented economic growth. Yet, by enabling senior workers to accomplish more tasks independently, AI may reduce entry-level opportunities, raising concerns about how future generations will acquire expertise. This paper develops a model to examine how automation and AI affect the intergenerational transmission of tacit knowledge — practical, hard-to-codify skills critical to workplace success. I show that the competitive equilibrium features socially excessive automation of early-career tasks, and that improvements in such automation generate an intergenerational trade-off: they raise short-run productivity but weaken the skills of future generations, slowing long-run growth — sometimes enough to reduce welfare. Back-of-the-envelope calculations suggest that AI-driven entry-level automation could reduce the long-run annual growth rate of U.S. per-capita output by 0.05 to 0.35 percentage points, depending on its scale. I further show that AI co-pilots can partially offset lost learning by assisting individuals who fail to acquire skills early in their careers. However, they may also weaken juniors’ incentives to develop such skills. These findings highlight the importance of preserving and expanding early-career learning opportunities to fully realize AI’s potential.