How Does AI Change Labor Demand? Evidence from 41 Countries

Abstract

New technologies can raise demand for some workers while lowering it for others, but knowing which workers gain and which lose is challenging. We study this question for generative AI. Our model decomposes changes in labor demand following firm AI adoption into a firm-wide productivity effect and worker-type-specific changes in task content. We take the model to the data, analyzing a sample of 1.25 billion job postings and 154 million employment records across 41 countries. We infer AI adoption from job advertisements that involve generative AI use. An instrumented event study shows that foreign affiliates of AI-adopting companies reduce the junior share of their workforce relative to comparable control affiliates. The decline primarily comes from growth in senior employment rather than from a fall in junior employment, with suggestive evidence of modest overall employment growth. Senior employment shifts toward AI-exposed occupations, while our point estimates suggest a shift away from these occupations among juniors. The model-based decomposition provides suggestive evidence of modest productivity gains from AI adoption.

The authors' own abstract, copied from digitaleconomy.stanford.edu.

How to cite it

Built from the details listed on this page. Check them against the paper before you submit.

Chandar, B., & Teeselink, B. K. (n.d.). How Does AI Change Labor Demand? Evidence from 41 Countries. Working paper (Stanford Digital Economy Lab). https://digitaleconomy.stanford.edu/publication/how-does-ai-change-labor-demand/

Chandar, Bharat, et al. "How Does AI Change Labor Demand? Evidence from 41 Countries." Working paper (Stanford Digital Economy Lab), n.d., https://digitaleconomy.stanford.edu/publication/how-does-ai-change-labor-demand/.

@article{chandarndhow,
  title = {How Does AI Change Labor Demand? Evidence from 41 Countries},
  author = {Bharat Chandar and Bouke Klein Teeselink},
  journal = {Working paper (Stanford Digital Economy Lab)},
  year = {n.d.},
  url = {https://digitaleconomy.stanford.edu/publication/how-does-ai-change-labor-demand/},
}

What it is

Stanford Digital Economy Lab working paper by Bharat Chandar and Bouke Klein Teeselink, separating what happens to jobs after a firm adopts generative AI into a company-wide productivity effect and changes in what specific kinds of workers are asked to do.

Topics