GPTs and Labor Markets in the Developing Economy: Evidence from China

20 Pages Posted: 26 Apr 2023

See all articles by Bowen Lou

Bowen Lou

University of Connecticut - Operations & Information Management Department

Hongshen Sun

Massachusetts Institute of Technology (MIT) - Sloan School of Management; Cheung Kong Graduate School of Business

Tianshu Sun

Cheung Kong Graduate School of Business; University of Southern California - Marshall School of Business

Date Written: April 23, 2023

Abstract

In this paper, we investigate the potential impact of recent advances in AI, Generative Pre-trained Transformers (GPTs), on the labor markets in China. Using occupational data and the census data about the Chinese economy, we first adopt a recently developed methodology and design a rubric to link China’s occupations with new capabilities enabled by GPTs. Then we systematically estimate the extent to which occupations, industries, and geographic regions are exposed to the capabilities of GPTs in China. Our findings show that the contemporary labor markets in China have lower potential of exposure to GPTs compared to the U.S., in terms of the percentage of tasks within occupations exposed to GPTs. While the magnitude of potential exposure could be relatively small, we find that GPTs, at their current status, could have pervasive effects across different occupations, industries, and cities in China. New capabilities enabled by GPTs could have greater impacts on knowledge-oriented job categories. Information processing and financial sectors could face the highest exposure, whereas mining and construction sectors could have much lower exposure. Our exploratory analyses of over 300 major cities in China show that GPTs could have greater impacts on the workforce in premium cities that are direct-controlled municipalities, sub-provincial level municipalities, or provincial capitals. Implications of the findings are discussed. Overall, this study sheds light on the general-purpose nature of GPTs and structural changes that they could bring about in one of the major developing economies in the world.

Keywords: artificial intelligence, ChatGPT, labor markets, geography, China, developing economy

Suggested Citation

Lou, Bowen and Sun, Hongshen and Sun, Tianshu, GPTs and Labor Markets in the Developing Economy: Evidence from China (April 23, 2023). Available at SSRN: https://ssrn.com/abstract=4426461 or http://dx.doi.org/10.2139/ssrn.4426461

Bowen Lou (Contact Author)

University of Connecticut - Operations & Information Management Department ( email )

Hongshen Sun

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Cheung Kong Graduate School of Business ( email )

1017, Oriental Plaza 1
No.1 Dong Chang'an Street
Beijing
China

Tianshu Sun

Cheung Kong Graduate School of Business ( email )

1017, Oriental Plaza 1
No.1 Dong Chang'an Street
Beijing
China

University of Southern California - Marshall School of Business ( email )

3670 Trousdale Parkway
Bridge Hall 310B
Los Angeles, CA 90089
United States

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