Artificial Intelligence and High-Skilled Work: Evidence from Analysts

Abstract

Policymakers fear artificial intelligence (AI) will disrupt labor markets, especially for high-skilled workers. We investigate this concern using novel, task-specific data for security analysts. Exploiting variation in AI's power across stocks, we show analysts with portfolios that are more exposed to AI are more likely to reallocate efforts to soft skills, shift coverage towards low AI stocks, and even leave the profession. Analyst departures disproportionately occur among highly accurate analysts, leaving for non-research jobs. Reallocating efforts toward tasks that rely on social skills improve consensus forecasts. However, increased exposure to AI reduces the novelty in analysts' research which reduces compensation.

Keywords: artificial intelligence, big data, technology, automation, sell-side analysts, job displacement, labor and finance, social skills, non-cognitive skills, tasks, skill premium, skill-biased technological change, compensation

JEL Classification: G17, G24, J23, J24, J31, O33