The Labor Market Effects of AI Automation and Augmentation

Tomáš Oleš and Francesco Roncone

No 1821, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: Does artificial intelligence automate work or augment workers' productive capabilities? Our results show that it can do both, through distinct channels that conventional exposure measures obscure. We distinguish these channels by linking U.S. patents to occupations' tasks and tools, with patent-task matches capturing automation and patent-tool matches capturing augmentation. Using the origins and diffusion of historical AI breakthroughs to predict contemporary local exposure, we find large but opposing labor-market effects. A one-standarddeviation increase in AI automation reduces occupational employment by 21 percent, with little effect on wages; AI augmentation instead raises wages by 8 percent, alongside some employment growth. We also find that a larger AI share within each channel strengthens labor displacement through automation while shifting augmentation's effects from employment growth toward wage gains. The labor-market consequences of AI therefore depend critically on the balance between automation and augmentation rather than overall exposure alone.

Keywords: Artificial Intelligence; Automation; Augmentation; Local Labor Markets; Occupational Tasks; Occupational Tools (search for similar items in EconPapers)
JEL-codes: J23 J24 J30 O33 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-ain, nep-edu, nep-lma and nep-tid
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