Assessing Early Labor Market Effects of Generative AI - Evidence from Population Data

Antti Kauhanen and Petri Rouvinen

No 121, ETLA Working Papers from The Research Institute of the Finnish Economy

Abstract: Abstract This study examines the short-term impact of generative artificial intelligence (GAI) on employment and wages using data covering all wage earners from Finland. Employing a synthetic difference-in-differences approach, we analyze how the launch of ChatGPT affected occupations with varying levels of exposure to GAI. Our findings reveal that wages increased more in highly GAI-exposed occupations compared to less exposed ones following ChatGPT’s introduction. However, we do not observe statistically significant changes in employment levels between more and less exposed occupations. Additional analyses comparing more- and less-exposed occupations within specific occupational groups yield qualitatively similar results. These findings contrast with some previous studies on online labor markets but align more closely with research using nationally representative data. The positive wage effect observed in AI-exposed occupations could indicate that GAI is primarily enhancing rather than replacing human labor. The lack of significant employment effects might suggest that the impact of GAI on job creation or destruction may take longer to materialize or might be offset by other factors in the labor market.

Keywords: Generative artificial intelligence; Technological change; Employment; Wages; Occupations (search for similar items in EconPapers)
JEL-codes: E24 J21 O33 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2024-11-19
New Economics Papers: this item is included in nep-ain and nep-tid
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