Tiptoeing Around AI: Job Displacement and AI Disclosure

Abstract

We examine whether and how employees' perception regarding job displacement influences firms' voluntary disclosure of their artificial intelligence (AI) strategies. Using local cable news transcripts over the 2010-2022 period, we develop a novel measure that gauges employee sentiment on AI-induced displacement. We find compelling evidence that AI-adopting firms are less prone to disclose their AI strategies when sentiment toward AI-induced displacement is high. The effect is stronger when occupations are more susceptible to AI displacement and when AI disclosures likely elicit unfavorable employee responses. Overall, our results shed light on the trade-offs between maintaining transparency and avoiding adverse employee responses in the era of disruptive technological advancement.

Keywords: Artificial Intelligence, Voluntary Disclosure, Job Displacement, Employees

JEL Classification: J4, M4, O3