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

Duke University - Fuqua School of Business; Duke Innovation & Entrepreneurship Initiative

Roni Michaely

University of Geneva - Geneva Finance Research Institute (GFRI); Swiss Finance Institute

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)

Duke University - Fuqua School of Business ( email )

Box 90120
Durham, NC 27708-0120
United States

Duke Innovation & Entrepreneurship Initiative ( email )

215 Morris St., Suite 300
Durham, NC 27701
United States

Roni Michaely

University of Geneva - Geneva Finance Research Institute (GFRI) ( email )

40 Boulevard du Pont d'Arve
Geneva 4, Geneva 1211
Switzerland

Swiss Finance Institute

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4
Switzerland

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