Expecting job replacement by GenAI: effects on workers' economic outlook and behavior

Yusuke Aoki, Joon Suk Park, Yuya Takada and Koji Takahashi

No 1269, BIS Working Papers from Bank for International Settlements

Abstract: This paper examines the relationship between individuals' expectations of job replacement by generative AI (GenAI) and their macroeconomic outlooks and behaviors. Using online surveys combined with randomized experiments conducted in the U.S. and Japan, we derive the following findings about the effects of expecting greater job replacement due to GenAI. First, in both the U.S. and Japan, respondents revise their beliefs after receiving information about GenAI's job replacement ratios. Second, in Japan, such an expectation leads to an increase in inflation expectations driven by a rise in investment. Third, it increases respondents' willingness to use GenAI in workplaces in Japan. Fourth, in the U.S., expectations of greater job replacement amplify concerns about weaker short-term labor demand and reduced skill requirements, particularly among more educated respondents. In addition, these respondents anticipate lower investment, while less educated respondents expect higher investment.

Keywords: Generative Artificial intelligence; labor market; inflation; productivity (search for similar items in EconPapers)
JEL-codes: E24 E31 O30 (search for similar items in EconPapers)
Date: 2025-05
New Economics Papers: this item is included in nep-ain and nep-exp
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