Artificial intelligence and the skill premium

David E. Bloom (), Klaus Prettner, Jamel Saadaoui and Mario Veruete ()
Additional contact information
David E. Bloom: Harvard TH Chan School of Public Health
Mario Veruete: Quantum DataLab

Department of Economics Working Papers from Vienna University of Economics and Business, Department of Economics

Abstract: What will likely be the effect of the emergence of ChatGPT and other forms of artificial intelligence (AI) on the skill premium? To address this question, we develop a nested constant elasticity of substitution production function that distinguishes between industrial robots and AI. 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.

Keywords: Automation; Artificial Intelligence; ChatGPT; Skill Premium; Wages; Productivity (search for similar items in EconPapers)
JEL-codes: J30 O14 O15 O33 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-cmp, nep-ltv and nep-tid
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https://research.wu.ac.at/ws/portalfiles/portal/59342198/WP353.pdf (application/pdf)

Related works:
Working Paper: Artificial Intelligence and the Skill Premium (2024)
Working Paper: Artificial Intelligence and the Skill Premium (2024)
Working Paper: Artificial intelligence and the skill premium (2023)
Working Paper: Artificial intelligence and the skill premium (2023)
Working Paper: Artificial intelligence and the skill premium (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwwuw:wuwp353

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