The Impact of Artificial Intelligence on the Labor Market
61 Pages Posted: 15 Nov 2019
Date Written: November 6, 2019
I develop a new method to predict the impacts of a technology on occupations. I use the overlap between the text of job task descriptions and the text of patents to construct a measure of the exposure of tasks to automation. I first apply the method to historical cases such as software and industrial robots. I establish that occupations I measure as highly exposed to previous automation technologies saw large declines in employment and wages over the relevant periods. I use the fitted parameters from the case studies to predict the impacts of artificial intelligence. I find that, in contrast to software and robots, AI is directed at high-skilled tasks. Under the assumption that the historical pattern of long-run substitution will continue, I estimate that AI will reduce 90:10 wage inequality, but will not affect the top 1%.
Keywords: artificial intelligence, robotics, technology, patents, occupations
JEL Classification: J23, J24, O33
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