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Displacement or Complementarity? The Labor Market Impact of Generative AI

Year: 2025

Type: article

Abstract: Generative AI is poised to reshape the labor market, affecting cognitive and white-collar occupations in ways distinct from past technological revolutions. This study examines whether generative AI displaces workers or augments their jobs by analyzing labor demand and skill requirements across occupations. Our findings reveal a heterogeneous effect: generative AI-driven automation reduces labor demand and skill requirements in structured cognitive-task jobs, while increasing both demand and skill complexity in positions that involve human-AI collaboration. These results highlight the importance of understanding generative AI’s nuanced impact on the labor market and designing targeted policies to mitigate job displacement while supporting skills development for human-AI collaboration.

Source: Journal of the Association for Information Systems

Authors: Zakerinia, Saleh, Chen, Wilbur, Srinivasan, Suraj

Institutions: Harvard University, Hong Kong University of Science and Technology

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: W7028014120

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