Firms ask workers to train AI systems that will replace them.
Firms ask workers to train AI systems that will replace them. We model this with a worker who can shirk, cooperate with training, or obstruct training while maintaining productivity. Because training ends the job but only cooperation completes training, dismissal becomes a weaker penalty for shirking. The firm must raise the worker’s rent, and the worker gains from their replacement. AI can create jobs paying more than they produce and eliminate jobs it never automates. Firms paying only wages may slow training. A credible completion bonus equal to the worker’s rent without AI removes both the gain and the slowdown. Thanks to Michael Dalton for helpful discussions, to Refine.ink, Claude Opus 5.5 and ChatGPT 6 Astra for helpful research assistance, and to the SSRHC for funding (Gans). Responsibility for all errors is our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. Joshua Gans has drawn on the findings of his research for both compensated speaking engagements and consulting engagements. He has written the books Prediction Machines, Power & Prediction, and Innovation + Equality on the economics of AI for which he receives royalties. He is also chief economist of the Creative Destruction Lab, a University of Toronto-based program that helps seed stage companies, from which he receives compensation. He conducts consulting on anti-trust and intellectual property matters with an association with Keystone Strategy and his ownership of Core Economic Research Ltd. He also has equity and advisory relationships with a number of startup firms. Joshua is also a co-founder of All Day TA. In addition toworking papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals—theNBER Reporter, theNBER Digest, theBulletin on Health, theBulletin on the Economics of Alzheimer's, and theBulletin on Entrepreneurship—as well asresearch spotlights, lectures, and panel videos.