Work

Artificial intelligence and the skill premium

Year: 2023

Type: preprint

Abstract: What will likely be the effect of the emergence of ChatGPT and other forms of artificial intelligence (AI) on the skill premium? To address this question, we develop a nested constant elasticity of substitution production function that distinguishes between industrial robots and AI. Industrial robots predominantly substitute for low-skill workers, whereas AI mainly helps to perform the tasks of high-skill workers. We show that AI reduces the skill premium as long as it is more substitutable for high-skill workers than low-skill workers are for high-skill workers.

Source: arXiv (Cornell University)

DOI: 10.48550/arxiv.2311.09255

Authors: Bloom, David E., Prettner, Klaus, Saadaoui, Jamel, Veruete, Mario

Institutions: Harvard University, Vienna University of Economics and Business, Centre National de la Recherche Scientifique, Bureau d'Economie Théorique et Appliquée, Université de Strasbourg, Université de Lorraine

Language: English

Topic: Labor market dynamics and wage inequality

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: green

OpenAlex ID: W4388787329

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