AI and Jobs: Evidence from Online Vacancies

Acemoglu/Autor/Hazell/Restrepo find that despite a rapid growth in demand for workers with AI expertise outside of those individuals the diffusion of AI into businesses hasn’t impacted overall employment (yet) despite AI replacing humans in some tasks, “…. we find no discernible relationship between AI exposure and employment or wage growth at the occupation or industry level, implying that AI is currently substituting for humans in a subset of tasks but it is not yet having detectable aggregate labor market consequences….”

Overall finding“…We study the impact of AI on labor markets, using establishment level data on vacancies with detailed occupational information comprising the near-universe of online vacancies in the US from 2010 onwards. We classify establishments as “AI exposed” when their workers engage in tasks that are compatible with current AI capabilities. We document rapid growth in AI related vacancies over 2010-2018 that is not limited to the Professional and Business Services and Information Technology sectors and is significantly greater in AI-exposed establishments. AI-exposed establishments are differentially eliminating vacancy postings that list a range of previously-posted skills while simultaneously posting skill requirements that were not previously listed. Establishment-level estimates suggest that AI-exposed establishments are reducing hiring in non-AI positions as they expand AI hiring. However, we find no discernible relationship between AI exposure and employment or wage growth at the occupation or industry level, implying that AI is currently substituting for humans in a subset of tasks but it is not yet having detectable aggregate labor market consequences….Taken together, we interpret these results as indicating that there is a genuine increase in the deployment of AI technologies throughout the US economy and this increase is much more pronounced in establishments that have task structures suitable for deploying AI-powered algorithms. Reflecting the potential for substitution between algorithms and humans, we detect nontrivial reductions in non-AI hiring in more AI-exposed establishments, though these estimates are not uniformly robust with all three of our AI exposure measures. We do not detect any aggregate relationships between AI exposure and either employment or wages, plausibly because AI technologies are still in their infancy and have spread only to a limited part of the US economy. ”

Takeaway, “…Our results consistently show no positive relationship between AI exposure and establishment hiring. Rather, we find evidence of lower hiring associated with greater AI exposure in almost all of the specifications using the Felten et al. measure and in most specifications with the Webb measure. The timing of these relationships is also plausible, concentrating in the time window between 2014 and 2018, during which AI vacancy postings surged. This pattern of results, combined with our estimatesshowing that AI adoption is concentrated in establishments with more AI-exposed tasks, suggests that the recent AI surge is driven in part by task substitution whereby AI automates a subset of tasks formerly performed by labor. We find no evidence for either the view that there are major human-AI complementarities in these establishments or the expectation that AI will increase hiring because of its large productivity effects—though of course we cannot rule out that other applications of AI not captured here could have such effects. In contrast to the establishment-level patterns, we do not detect any relationship between AI exposure and overall employment or wages at the industry or occupation level. There are no significant employment impacts on industries that have a task structure that exhibit greater exposure to AI, and also no employment or wages effects for occupations that are more exposed to AI. We conclude that despite the notable surge in AI adoption, the impact of AI is still too small relative to the scale of the US labor market to have had first-order impacts on employment patterns—outside of AI hiring itself…”

However overall the impact of increased AI exposure on employment or wages at the aggregate occupation or industry level doesn’t show up in data. So isn’t AI having aggregate labor market consequences (yet)

First core finding, employment market for persons with AI expertise took off around 2015-2016“…Our first result is that there is a rapid takeoff in AI vacancy postings starting in 2010 and significantly accelerating around 2015-2016. Moreover, consistent with a task-based view of AI, this AI adoption is driven by establishments with task structures that are compatible with current AI capabilities. For instance, a one standard deviation increase in our baseline measure of AI exposure based on Felten et al.—which is approximately the difference in the average AI exposure between finance versus the mining and oil extraction sector—is associated with 15% more AI vacancy posting. The strong association between AI exposure and subsequent AI hiring is robust to numerous controls and specification checks when using the Felten et al. and the Webb measures, but not robust with SML. Because the SML measure is not strongly predictive of AI adoption, we place greater emphasis on the other two measures, Felten et al. and Webb…”

Second core finding, firms seems to be substituting AI for labor in some cases, however net employment impact is limited“…. We then investigate whether AI exposure is associated with changes in the skill content of posted vacancies. With the Felten et al. and Webb measures (and with the SML measure to a lesser degree),we find that AI exposure is associated with both a significant decline in some of the skills previously demanded in vacancies and the emergence of new skillThis evidence bolsters the case that AI is altering the task structure of jobs, replacing some human-performed tasks while simultaneously generating new tasks accompanied by new skill demands….”

They find that AI vacancies are growing rapidly, even outside IT, and especially in AI exposed firms. These firms are responding by posting vacancies for new skills that they did not previously require, and posting fewer vacancies for the skills that they previously required presumably as AI substitutes for labor. These firms did reduce overall hiring in non-AI vacancies while increasing AI driven hiring (ie workers with AI skills)