Artificial Intelligence and the Skill Premium

David E. Bloom (), Klaus Prettner, Jamel Saadaoui and Mario Veruete ()
Additional contact information
David E. Bloom: Harvard School of Public Health
Mario Veruete: Quantum DataLab

No 16972, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: How will the emergence of ChatGPT and other forms of artificial intelligence (AI) affect the skill premium? To address this question, we propose a nested constant elasticity of substitution production function that distinguishes among three types of capital: traditional physical capital (machines, assembly lines), industrial robots, and AI. Following the literature, we assume that industrial robots predominantly substitute for low-skill workers, whereas AI mainly helps to perform the tasks of high-skill workers. We show that AI reduces the skill premium as long as it is more substitutable for high-skill workers than low-skill workers are for high-skill workers.

Keywords: automation; artificial intelligence; ChatGPT; skill premium; wages; productivity (search for similar items in EconPapers)
JEL-codes: J30 O14 O15 O33 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2024-05
New Economics Papers: this item is included in nep-ain, nep-ltv and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Artificial Intelligence and the Skill Premium (2024)
Working Paper: Artificial intelligence and the skill premium (2023)
Working Paper: Artificial intelligence and the skill premium (2023)
Working Paper: Artificial intelligence and the skill premium (2023)
Working Paper: Artificial intelligence and the skill premium (2023)
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