The Short-Term Effects of Generative Artificial Intelligence on Employment: Evidence from an Online Labor Market

30 Pages Posted: 1 Aug 2023

See all articles by Xiang Hui

Xiang Hui

Washington University in St. Louis - John M. Olin Business School

Oren Reshef

Washington University in Saint Louis, John M. Olin Business School, Students

Luofeng Zhou

New York University (NYU) - Leonard N. Stern School of Business

Date Written: July 31, 2023

Abstract

Generative Artificial Intelligence (AI) holds the potential to either complement knowledge workers by increasing their productivity or substitute them entirely. We examine the short-term effects of the recent release of the large language model (LLM), ChatGPT, on the employment outcomes of freelancers on a large online platform. We find that freelancers in highly affected occupations suffer from the introduction of generative AI, experiencing reductions in both employment and earnings. We find similar effects studying the release of other image-based, generative AI models. Exploring the heterogeneity by freelancers' employment history, we do not find evidence that high-quality service, measured by their past performance and employment, moderates the adverse effects on employment. In fact, we find suggestive evidence that top freelancers are disproportionately affected by AI. These results suggest that in the short term generative AI reduces overall demand for knowledge workers of all types, and may have the potential to narrow gaps among workers.

Keywords: Artificial Intelligence; large language model; GPT

Suggested Citation

Hui, Xiang and Reshef, Oren and Zhou, Luofeng, The Short-Term Effects of Generative Artificial Intelligence on Employment: Evidence from an Online Labor Market (July 31, 2023). Available at SSRN: https://ssrn.com/abstract=4527336 or http://dx.doi.org/10.2139/ssrn.4527336

Xiang Hui (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Oren Reshef

Washington University in Saint Louis, John M. Olin Business School, Students ( email )

St. Louis, MO
United States

Luofeng Zhou

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

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