Most adults spend more waking hours at work than anywhere else, and the first question people ask a stranger at a party is often "What do you do?" Before asking what machines might do to work, it helps to be clear about what work does for people. The answer turns out to be much more than a paycheck.

Paid and unpaid work

Economists usually mean paid employment when they say "work," but that is only part of the picture. Cooking, cleaning, raising children and caring for sick or elderly relatives are work too. Unpaid household and care work is left out of GDP, even though the economy could not run without it. The International Labour Organization estimated in 2018 that people around the world do about 16 billion hours of unpaid care work every day, roughly three quarters of it by women. Any honest account of automation has to remember this hidden labor, because a change in paid work often shifts the load at home as well.

Income, meaning and status

For most households, wages are the main source of income, so losing a job means losing the ability to pay rent and buy food. But work also gives many people a sense of purpose, a place in a community and a way to be seen as useful. A job title answers the question "Who are you?" in a way that few other things do. This is why studies of wellbeing find that unemployment lowers life satisfaction by more than the lost income alone can explain. In a well known 1994 paper, the British economists Andrew Clark and Andrew Oswald found that jobless people reported much lower wellbeing than employed people with similar incomes, and later research using the same people tracked over time has backed this up.

The weary village of Marienthal

The classic study of what joblessness does to a community took place in Marienthal, a village near Vienna whose textile mill closed around 1930, leaving most families without wages. A team led by Marie Jahoda, Paul Lazarsfeld and Hans Zeisel lived among the villagers and published their findings in 1933. Many observers at the time expected mass unemployment to make people angry and radical. Instead, the Marienthal researchers found that long joblessness brought apathy and resignation, not revolt. People walked more slowly in the street, borrowed fewer library books even though they had more free time, and dropped out of clubs and political groups. The researchers described it as a tired, worn-down community.

Jahoda later turned this into a theory. Work, she argued, has a manifest function, and the manifest function of work is earning money. It also has several latent functions that people rarely notice until they are gone. Jahoda's latent functions of work are time structure, social contact, shared purpose, status and regular activity. A job tells you when to get up, puts you among people outside your family, links your effort to a larger goal and gives you a recognized place in society. Her theory helps explain why a generous benefit check does not fully replace a job.

Lasting damage from job loss

The harm also lasts. Economists use the word "scarring" for the long shadow that job loss casts over a career. Steven Davis and Till von Wachter estimated in 2011 that American workers who lost stable jobs in mass layoffs went on to lose, over the next twenty years, earnings equal to roughly one and a half years of their old pay, and the losses from a mass layoff were largest when it happened during a recession, when they were closer to three years. Older workers and those with skills tied to one industry tend to suffer most.

Good work and bad work

Not all work gives meaning. In 1776 Adam Smith praised the division of labor for raising output, yet in the same book he worried about its effect on the mind. "The man whose whole life is spent in performing a few simple operations," he wrote, "has no occasion to exert his understanding." Smith warned that narrow, repetitive work could dull the mind, and he urged public schooling as a remedy. In 2018 the anthropologist David Graeber argued that a large share of modern office jobs feel pointless even to the people doing them. Survey researchers have pushed back: a 2022 study by Magdalena Soffia, Alex Wood and Brendan Burchell found that far fewer workers rate their own jobs as useless than Graeber suggested, and that the feeling is linked more to poor management and lack of respect than to job type. Both sides agree on one thing: the quality of work matters, not only its quantity.

Worked example: a layoff at the print shop

Rosa is 54 and has run a printing press for 28 years. Her plant closes after its biggest customer moves to digital catalogs. Suppose unemployment insurance replaces half her wage for six months. Apply the ideas from this level. Income: she has lost half her pay at once and, if scarring estimates hold, may earn less for years even after she finds work, because her skill with that press is worth little elsewhere. Latent functions: she has lost the 6 a.m. start that organized her day, the crew she ate lunch with and the pride of being the person who could fix the old machine. Unpaid work: she may take on more care for her grandchildren, which is real work that no statistic counts. A policy that only sends a check addresses one of these losses. The rest of this course asks how such losses arise when technology changes, and what can be done about them.