(How) Does Artificial Intelligence Raise Well-being? Evidence from Cities in the United States

Abstract

While artificial intelligence (AI) jobs as a share of total job postings have increased from 0.2% to nearly 1% between 2010 to 2019, their expansion varies significantly across space. Using new data on the incidence of these postings by city, combined with data on subjective well-being and economic activity, we document three new facts. First, cities with greater increases in the share of AI job postings between 2014 and 2018 exhibit greater economic growth. Second, the relationship between AI growth and economic growth is mediated by the initial industrial structure and human capital of cities' capabilities for conducting AI research and development. Third, increases in the AI share of jobs are associated with increases in subjective well-being, but they are mediated through economic growth. These results are consistent with models of structural transformation where technological change leads to improvements in well-being through improvements in economic activity.

Keywords: artificial intelligence, economic growth, industrial composition, subjective well-being, social welfare, structural change

JEL Classification: E24, J23, O47, L86