“Will AI take away jobs?” A very common question asked by many. A recent study, however, has revealed that AI has minimal impact on jobs and pay.
A paper released by ‘National Bureau of Economic Research’, Denmark, has studied the “labour market effects of AI chatbots” and analysed 25,000 workers across 7,000 workspaces.
“Using difference-in-differences and employer policies as quasi-experimental variation, we estimate precise zeros: AI chatbots have had no significant impact on earnings or recorded hours in any occupation, with confidence intervals ruling out effects larger than 1 per cent,” the study revealed.
Generative AI’s impact on the labour market is smaller, the study shows. It saves 3 per cent of the work time. However, the wages do not increase much, thus the limited labour market effects.
Further providing reasons as to why the labour market implications of generative AI remain unclear, the report stated first being the lack of evidence on whether “firms are making investments in integrating the tools into the workplace,” and the second is if AI chatbots are put into work to a wrong task, the effects can turn negative, and thirdly, generative AI affects productivity. However, it is “unclear how these translate into earnings and hours”.
The workers studied were mostly from the background of accounting, customer support, finance and HR, software development and teaching, these are the roles that AI could possibly disrupt.
After analysing, the data showed that AI did not displace human workers, nor did they notice change in productivity, or rise in salary for those using AI.
“While adoption has been rapid, with firms now heavily invested in unlocking the technological potential, the economic impacts remain small,” the report noted.
“The limited impacts of AI chatbots on workers’ earnings reflect a combination of modest productivity gains and weak pass-through to wages, although employer policies can enhance both,” it further added.
The study, comparing different companies on basis of usage of AI, found that there is no evidence that the companies with greater adoption have any significant difference in employment, wages, or retention of incumbent workers.