A study has investigated how strongly artificial intelligence affects the job market. It was found that AI especially makes it harder for newcomers to find a job. People with many years of experience are significantly less affected.
What kind of study is this? Stanford University, together with economist Erik Brynjolfsson, has released a study (PDF) on how artificial intelligence affects the job market and wages. The study reportedly examined data from the payroll company Automatic Data Processing and considered payroll records from thousands of companies with millions of employees in total.
And Stanford University found that artificial intelligence significantly complicates job searches for newcomers in the USA in areas such as software development and customer service.
Overall employment is growing, but young people are still finding jobs less frequently
Overall, the study establishes its findings based on 6 key insights.
The 6 key insights:
- Decline in employment for newcomers: Young workers (22–25) in highly AI-exposed professions such as software development and customer service are losing employment significantly.
- Uneven employment growth: While overall employment is growing, employment for young workers has stagnated since the end of 2022; a decline of 6% for them compared to +6–9% for older workers in the same professions.
- Difference by AI application: Job losses primarily occur in roles that can be automated by AI. AI that complements tasks does not negatively impact entry-level jobs.
- Robust pattern despite control: Declines among young workers persist even after controlling for company and time effects; a possible explanation: industry-specific shocks.
- Stronger impact on employment than on wages: Differences are primarily observed in employment, not in salaries.
- Broad applicability: Findings apply regardless of profession, remote work, or outsourcing potential and cannot be explained solely by previous AI exposure metrics. An “exposure metric” indicates how much a profession, task, or group of workers is affected by artificial intelligence (AI) and the likelihood that tasks in a profession can be automated or replaced by AI.
However, these developments may not be the end, the study warns. As AI continues to advance rapidly, Brynjolfsson warns that the impacts on younger workers could also extend to those with more experience.
We need to develop an early warning system in the form of a dashboard to monitor this in real time. This is a very consequential technology.
Artificial intelligence is considered a major challenge for many sectors. A CEO shared in a conversation how he reshaped his entire company to make it AI-ready. In doing so, employees had to be let go who refused to use AI: A CEO laid off almost 80% of his employees because they refused to use AI: Two years later he says he would do it again
