Annotated Bibliography - The Impact of Artificial Intelligence on the Labor Market (Webb, 2019)

Webb, Michael, The Impact of Artificial Intelligence on the Labor Market (November 6, 2019). Available at SSRN: https://ssrn.com/abstract=3482150 or http://dx.doi.org/10.2139/ssrn.3482150

In the paper “The Impact of Artificial Intelligence on the Labor Market”, the author Michael Webb, a Stanford University economy professor, describes a novel method he proposes to assess the impact of A.I. in the labor market.

In his proposed method, Webb identifies which tasks can be automated by the introduction of a particular technology (such as A.I.). That way, identifying the level of exposure of different occupations to such technology. Then, he empirically applies the method to two past technological advances that had significant impacts in the labor market: automation (robotics) and software, and determines the relationship between the exposure scores and the evolution of wages that the advent of automation and software brought upon.

Then, the author applies the method to Artificial Intelligence. The data suggests that the exposure that will be brought upon on the labor market by A.I. will be highest for high-skilled occupations. In addition, the paper suggests some of the occupations that are likely to be affected by the ever increasing power of A.I.: Clinical laboratory technicians that conduct visual and analytical work on tests, chemical engineers that design and operate production processes, Optometrists that detect diseases in the eye, power plants and data center safety operators that need to control the safety of energy outputs. On the other hand, some low-skilled workers are also at risk of being exposed to the advent of A.I., for instance, jobs that require inspection and quality control.

The occupations that are least exposed to the advent of A.I. on the labor market are those that involve interpersonal skills, like professors, managers, care-takers, or that require fine motor skills, like baristas, food preparation workers and massage therapists.

The paper concludes that A.I. is very likely to affect different occupations, and that are high-skilled workers that are more exposed. The data also suggests that while there will be a decrease in the inequality between the 10th and 90th percentile of wages in a profession, there might be a big increase in inequality between the 90th and 99th percentile in the same profession. The paper wraps up by recognizing that the method can measure the impact of A.I. in the demand of the labor market, it does not precisely assess how the same technology may impact the labor supply, for instance, by being used for the training of new workers.

This paper is a very interesting description of how A.I. might impact the labor market, it had strong quantitative methods and it is worth mentioning in our final narrative review.

Annotated Bibliography - The Impact of Artificial Intelligence on the Labor Market (Webb, 2019)

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Annotated Bibliography - The Impact of Artificial Intelligence on the Labor Market (Webb, 2019)

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