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Artificial Intelligence and the Skill Premium

David Bloom, Klaus Prettner, Jamel Saadaoui and Mario Veruete

No 32430, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: J30 O14 O15 O33 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-mac
Note: LS
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Related works:
Working Paper: Artificial Intelligence and the Skill Premium (2024) Downloads
Working Paper: Artificial intelligence and the skill premium (2023) Downloads
Working Paper: Artificial intelligence and the skill premium (2023) Downloads
Working Paper: Artificial intelligence and the skill premium (2023) Downloads
Working Paper: Artificial intelligence and the skill premium (2023) Downloads
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