Physical robots are way better for productivity than AI, but AI is way worse for how much of the paycheck actually goes to the worker.
SSRN · March 18, 2026 · 6330198
The Takeaway
We often assume AI is the ultimate driver of future growth, but this model shows that physical automation actually does more to create new tasks and boost the economy. Meanwhile, AI's primary effect is displacing labor without the same level of 'reinstatement' for human workers.
From the abstract
Automation technologies differ in their capacity to generate complementary human tasks. I build a two-frontier growth model in which physical and cognitive automation advance simultaneously but reinstate labor at different rates. The cognitive reinstatement rate is structurally estimated from U.S. commuting-zone wage data. Robot automation generates approximately 31 percent more aggregate productivity per unit of frontier advance than AI, driven almost entirely by differential task creation and