Artificial Intelligence and High-Skilled Work: Evidence from Analysts

74 Pages Posted: 30 Sep 2020 Last revised: 16 Oct 2020

See all articles by Jillian Grennan

Jillian Grennan

Santa Clara University, Leavey School of Business; Santa Clara University School of Law; University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Roni Michaely

The University of Hong Kong; ECGI

Date Written: August 26, 2020

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

Suggested Citation

Grennan, Jillian and Michaely, Roni, Artificial Intelligence and High-Skilled Work: Evidence from Analysts (August 26, 2020). Swiss Finance Institute Research Paper No. 20-84, Available at SSRN: https://ssrn.com/abstract=3681574 or http://dx.doi.org/10.2139/ssrn.3681574

Jillian Grennan (Contact Author)

Santa Clara University, Leavey School of Business ( email )

Santa Clara, CA 95053
United States

Santa Clara University School of Law ( email )

500 El Camino Real
Santa Clara, CA 95053
United States

University of California, Berkeley, Haas School of Business, Institue for Business and Social Impact

Berkeley, CA 94720
United States

Roni Michaely

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

ECGI ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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