IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v209y2024ics004016252400622x.html
   My bibliography  Save this article

Artificial intelligence's creation and displacement of labor demand

Author

Listed:
  • Choi, Taelim
  • Leigh, Nancey Green

Abstract

The paper explores the dynamics of labor demand creation and displacement from adopting artificial intelligence (AI) in US metropolitan statistical areas (MSAs). We combine unique online job postings and patent data to identify AI innovation and AI-skilled labor demand for specific industry sectors and locations. Our analysis shows that AI technologies are increasingly penetrating major industries and disproportionally generating new labor demand for AI-skilled workers in the MSAs in which AI innovation occurs. Our empirical model provides nascent evidence that demand for non-AI labor declines slightly in sectors and MSAs with higher AI skill adoption rates. This decline in labor demand is associated with non-routine cognitive analytical and inter-personal tasks in jobs not previously susceptible to displacement computerization.

Suggested Citation

  • Choi, Taelim & Leigh, Nancey Green, 2024. "Artificial intelligence's creation and displacement of labor demand," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    • Handle: RePEc:eee:tefoso:v:209:y:2024:i:c:s004016252400622x
    DOI: 10.1016/j.techfore.2024.123824
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S004016252400622X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2024.123824?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marco Vivarelli, 2014. "Innovation, Employment and Skills in Advanced and Developing Countries: A Survey of Economic Literature," Journal of Economic Issues, Taylor & Francis Journals, vol. 48(1), pages 123-154.
    2. Daron Acemoglu & David Autor & Jonathon Hazell & Pascual Restrepo, 2022. "Artificial Intelligence and Jobs: Evidence from Online Vacancies," Journal of Labor Economics, University of Chicago Press, vol. 40(S1), pages 293-340.
    3. Daron Acemoglu & Pascual Restrepo, 2019. "Automation and New Tasks: How Technology Displaces and Reinstates Labor," Journal of Economic Perspectives, American Economic Association, vol. 33(2), pages 3-30, Spring.
    4. Michael Storper & Anthony J. Venables, 2004. "Buzz: face-to-face contact and the urban economy," Journal of Economic Geography, Oxford University Press, vol. 4(4), pages 351-370, August.
    5. Brad Hershbein & Lisa B. Kahn, 2018. "Do Recessions Accelerate Routine-Biased Technological Change? Evidence from Vacancy Postings," American Economic Review, American Economic Association, vol. 108(7), pages 1737-1772, July.
    6. Daron Acemoglu & David Autor & Jonathon Hazell & Pascual Restrepo, 2020. "AI and Jobs: Evidence from Online Vacancies," NBER Working Papers 28257, National Bureau of Economic Research, Inc.
    7. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    8. Alekseeva, Liudmila & Azar, José & Giné, Mireia & Samila, Sampsa & Taska, Bledi, 2021. "The demand for AI skills in the labor market," Labour Economics, Elsevier, vol. 71(C).
    9. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
    10. Dosi, G. & Piva, M. & Virgillito, M.E. & Vivarelli, M., 2021. "Embodied and disembodied technological change: The sectoral patterns of job-creation and job-destruction," Research Policy, Elsevier, vol. 50(4).
    11. Jensen, Morten Berg & Johnson, Bjorn & Lorenz, Edward & Lundvall, Bengt Ake, 2007. "Forms of knowledge and modes of innovation," Research Policy, Elsevier, vol. 36(5), pages 680-693, June.
    12. Markus Grillitsch & Michaela Trippl, 2014. "Combining Knowledge from Different Sources, Channels and Geographical Scales," European Planning Studies, Taylor & Francis Journals, vol. 22(11), pages 2305-2325, November.
    13. Andres Rodriguez-Pose & Riccardo regstdcenzi, 2008. "Research and Development, Spillovers, Innovation Systems, and the Genesis of Regional Growth in Europe," Regional Studies, Taylor & Francis Journals, vol. 42(1), pages 51-67.
    14. Anders Malmberg & Peter Maskell, 2006. "Localized Learning Revisited," Growth and Change, Wiley Blackwell, vol. 37(1), pages 1-18, March.
    15. Roberto Antonietti & Sandro Montresor, 2021. "Going beyond Relatedness: Regional Diversification Trajectories and Key Enabling Technologies (KETs) in Italian Regions," Economic Geography, Taylor & Francis Journals, vol. 97(2), pages 187-207, March.
    16. Fossen, Frank M. & Sorgner, Alina, 2022. "New digital technologies and heterogeneous wage and employment dynamics in the United States: Evidence from individual-level data," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    17. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    18. Igna, Ioana & Venturini, Francesco, 2023. "The determinants of AI innovation across European firms," Research Policy, Elsevier, vol. 52(2).
    19. Melanie Arntz & Terry Gregory & Ulrich Zierahn, 2016. "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis," OECD Social, Employment and Migration Working Papers 189, OECD Publishing.
    20. Adelheid Holl & Bettina Peters & Christian Rammer, 2023. "Local knowledge spillovers and innovation persistence of firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 32(6), pages 826-850, August.
    21. Bengt-ake Lundvall & Bjorn Johnson, 1994. "The Learning Economy," Industry and Innovation, Taylor & Francis Journals, vol. 1(2), pages 23-42.
    22. Erik Brynjolfsson & Tom Mitchell & Daniel Rock, 2018. "What Can Machines Learn, and What Does It Mean for Occupations and the Economy?," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 43-47, May.
    23. Dmitriev, Mikhail & Comin, Diego & Rossi-Hansberg, Esteban, 2012. "The Spatial Diffusion of Technology," CEPR Discussion Papers 9208, C.E.P.R. Discussion Papers.
    24. Dahlke, Johannes & Beck, Mathias & Kinne, Jan & Lenz, David & Dehghan, Robert & Wörter, Martin & Ebersberger, Bernd, 2024. "Epidemic effects in the diffusion of emerging digital technologies: evidence from artificial intelligence adoption," Research Policy, Elsevier, vol. 53(2).
    25. Mikhail Martynovich & Josef Taalbi, 2023. "Dynamic recombinant relatedness and its role for regional innovation," European Planning Studies, Taylor & Francis Journals, vol. 31(5), pages 1070-1094, May.
    26. Van Roy, Vincent & Vértesy, Dániel & Vivarelli, Marco, 2018. "Technology and employment: Mass unemployment or job creation? Empirical evidence from European patenting firms," Research Policy, Elsevier, vol. 47(9), pages 1762-1776.
    27. Stefano Breschi & Francesco Lissoni, 2001. "articles: Localised knowledge spillovers vs. innovative milieux: Knowledge "tacitness" reconsidered," Papers in Regional Science, Springer;Regional Science Association International, vol. 80(3), pages 255-273.
    28. Edward W. Felten & Manav Raj & Robert Seamans, 2018. "A Method to Link Advances in Artificial Intelligence to Occupational Abilities," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 54-57, May.
    29. Thomas Doring & Jan Schnellenbach, 2006. "What do we know about geographical knowledge spillovers and regional growth?: A survey of the literature," Regional Studies, Taylor & Francis Journals, vol. 40(3), pages 375-395.
    30. Nicholas Bloom & Tarek A. Hassan & Aakash Kalyani & Josh Lerner & Ahmed Tahoun, 2020. "The Geography of New Technologies," Working Papers Series inetwp126, Institute for New Economic Thinking.
    31. Casas, Pablo & Román, Concepción, 2023. "Early retired or automatized? Evidence from the survey of health, ageing and retirement in Europe," The Journal of the Economics of Ageing, Elsevier, vol. 24(C).
    32. Stéphane Maraut & Hélène Dernis & Colin Webb & Vincenzo Spiezia & Dominique Guellec, 2008. "The OECD REGPAT Database: A Presentation," OECD Science, Technology and Industry Working Papers 2008/2, OECD Publishing.
    33. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    34. Nancey Green Leigh & Benjamin Kraft & Heonyeong Lee, 2020. "Robots, skill demand and manufacturing in US regional labour markets," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 13(1), pages 77-97.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Montobbio, Fabio & Staccioli, Jacopo & Virgillito, Maria Enrica & Vivarelli, Marco, 2022. "Robots and the origin of their labour-saving impact," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    2. Łukasz Arendt & Eugeniusz Kwiatkowski, 2023. "Kontrowersje wokół wpływu nowoczesnych technologii na zatrudnienie i bezrobocie," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 2, pages 195-216.
    3. Usabiaga, Carlos & Núñez, Fernando & Arendt, Lukasz & Gałecka-Burdziak, Ewa & Pater, Robert, 2022. "Skill requirements and labour polarisation: An association analysis based on Polish online job offers," Economic Modelling, Elsevier, vol. 115(C).
    4. Barbieri, Laura & Mussida, Chiara & Piva, Mariacristina & Vivarelli, Marco, 2019. "Testing the employment and skill impact of new technologies: A survey and some methodological issues," MERIT Working Papers 2019-032, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Albanesi, Stefania & Dias da Silva, Antonio & Jimeno, Juan Francisco & Lamo, Ana & Wabitsch, Alena, 2023. "New Technologies and Jobs in Europe," CEPR Discussion Papers 18220, C.E.P.R. Discussion Papers.
    6. Cirillo, Valeria & Mina, Andrea & Ricci, Andrea, 2024. "Digital technologies, labor market flows and training: Evidence from Italian employer-employee data," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    7. Fossen, Frank M. & Sorgner, Alina, 2022. "New digital technologies and heterogeneous wage and employment dynamics in the United States: Evidence from individual-level data," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    8. Mauro Caselli & Andrea Fracasso & Arianna Marcolin & Sergio Scicchitano, 2023. "The reassuring effect of firms' technological innovations on workers' job insecurity," International Journal of Manpower, Emerald Group Publishing Limited, vol. 45(4), pages 754-778, October.
    9. Songul Tolan & Annarosa Pesole & Fernando Martinez-Plumed & Enrique Fernandez-Macias & José Hernandez-Orallo & Emilia Gomez, 2020. "Measuring the Occupational Impact of AI: Tasks, Cognitive Abilities and AI Benchmarks," JRC Working Papers on Labour, Education and Technology 2020-02, Joint Research Centre.
    10. Zhang, Xinchun & Sun, Murong & Liu, Jianxu & Xu, Aijia, 2024. "The nexus between industrial robot and employment in China: The effects of technology substitution and technology creation," Technological Forecasting and Social Change, Elsevier, vol. 202(C).
    11. Markus Grillitsch & Magnus Nilsson, 2017. "Firm performance in the periphery: on the relation between firm-internal knowledge and local knowledge spillovers," Regional Studies, Taylor & Francis Journals, vol. 51(8), pages 1219-1231, August.
    12. Borsato, Andrea & Lorentz, André, 2023. "The Kaldor–Verdoorn law at the age of robots and AI," Research Policy, Elsevier, vol. 52(10).
    13. Nicolaj S{o}ndergaard Muhlbach, 2021. "occ2vec: A principal approach to representing occupations using natural language processing," Papers 2111.02528, arXiv.org, revised Jul 2022.
    14. Genz, Sabrina & Schnabel, Claus, 2021. "Digging into the Digital Divide: Workers' Exposure to Digitalization and Its Consequences for Individual Employment," IZA Discussion Papers 14649, Institute of Labor Economics (IZA).
    15. Cirillo, Valeria & Evangelista, Rinaldo & Guarascio, Dario & Sostero, Matteo, 2021. "Digitalization, routineness and employment: An exploration on Italian task-based data," Research Policy, Elsevier, vol. 50(7).
    16. Innocenti, Stefania & Golin, Marta, 2022. "Human capital investment and perceived automation risks: Evidence from 16 countries," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 27-41.
    17. Nicola Cassandro & Marco Centra & Dario Guarascio & Piero Esposito, 2021. "What drives employment–unemployment transitions? Evidence from Italian task-based data," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 1109-1147, October.
    18. Hang, Leiming & Lu, Wei & Ge, Xiaowei & Ye, Bin & Zhao, Zhiqi & Cheng, Fangfang, 2024. "R&D innovation, industrial evolution and the labor skill structure in China manufacturing," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    19. Jean-Philippe Deranty & Thomas Corbin, 2022. "Artificial Intelligence and work: a critical review of recent research from the social sciences," Papers 2204.00419, arXiv.org.
    20. Fossen, Frank M. & McLemore, Trevor & Sorgner, Alina, 2024. "Artificial Intelligence and Entrepreneurship," IZA Discussion Papers 17055, Institute of Labor Economics (IZA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:209:y:2024:i:c:s004016252400622x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.