The Effects of Artificial Intelligence on Jobs: Evidence from an AI Subsidy Program

Mark Hellsten (), Shantanu Khanna (), Magnus Lodefalk () and Yaroslav Yakymovych ()
Additional contact information
Mark Hellsten: University of Tübingen, Postal: University of Tübingen, Geschwister-Scholl-Platz, 72074 Tübingen , Germany, https://sites.google.com/view/markhellsten/home
Shantanu Khanna: Northeastern University, Postal: Northeastern University, 420 Renaissance Park, 1135 Tremont Street, Boston, MA 02115, 617.373.5173, https://cssh.northeastern.edu/faculty/shantanu-khanna/
Magnus Lodefalk: Örebro University School of Business, Postal: Örebro University, School of Business, SE - 701 82 ÖREBRO, Sweden, https://www.oru.se/english/employee/magnus_lodefalk
Yaroslav Yakymovych: Uppsala University, Postal: Uppsala University, Trädgårdsgatan 18, Box 514, 751 20 Uppsala, https://www.uu.se/kontakt-och-organisation/personal?query=N16-716

No 2025:13, Working Papers from Örebro University, School of Business

Abstract: Artificial intelligence (AI) is expected to reshape labor markets, yet causal evidence remains scarce. We exploit a novel Swedish subsidy program that encouraged small and mid-sized firms to adopt AI. Using a synthetic difference-in-differences design comparing awarded and non-awarded firms, we find that AI subsidies led to a sustained increase in job postings over five years, but with no statistically detectable change in employment. This pattern reflects hiring signals concentrated in AI occupations and white-collar roles. Our findings align with task-based models of automation, in which AI adoption reconfigures work and spurs demand for new skills, but hiring frictions and the need for complementary investments delay workforce expansion.

Keywords: Artificial intelligence; Labor markets; Hiring; Task content; Technological change (search for similar items in EconPapers)
JEL-codes: J23 J24 O33 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2025-11-14
New Economics Papers: this item is included in nep-eur and nep-hrm
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:oruesi:2025_013

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