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Does AI Displace Work? The Impact of ChatGPT Launch on the Demand for Work

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  • Kässi, Otto

Abstract

We examine the effects of generative artificial intelligence (GenAI) on the labor market, specifically focusing on the impact of ChatGPT on job demand. Using micro-level data from one of the largest online labor platforms, we classify new job postings into three categories: substitutable, augmenting, and unaffected. We apply a difference-in-differences method to explore how ChatGPT’s deployment has altered labor demand within these categories. Our findings show a slight decrease in openings for substitutable jobs, where GenAI can fully perform tasks without loss of quality. However, there is an increase in demand for augmenting and unaffected jobs, which either benefit from faster task completion due to GenAI assistance or remain unchanged by it. The data indicates that ChatGPT’s introduction has not uniformly decreased labor demand but rather redistributed it, leading to growth in some sectors and declines in others.

Suggested Citation

  • Kässi, Otto, 2024. "Does AI Displace Work? The Impact of ChatGPT Launch on the Demand for Work," ETLA Brief 136, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:136
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    More about this item

    Keywords

    Generative artificial intelligence; Technological change; Labour demand; Labour markets;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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