Artificial intelligence and the skill premium

David E. Bloom; Klaus Prettner; Jamel Saadaoui; Mario Veruete

doi:10.1016/j.frl.2025.107401

Artificial intelligence and the skill premium

David E. Bloom, Klaus Prettner, Jamel Saadaoui, Mario Veruete

Department für Volkswirtschaft (Prettner)

Publikation: Wissenschaftliche Fachzeitschrift › Originalbeitrag in Fachzeitschrift › Begutachtung

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Abstract

How will ChatGPT and other forms of artificial intelligence (AI) affect the skill premium? To address this question, we propose a nested constant elasticity of substitution production function that distinguishes among three types of capital: traditional physical capital (machines, assembly lines), industrial robots, and AI. Following the literature, we assume that industrial robots predominantly substitute for low-skill workers, whereas AI mainly helps to perform the tasks of high-skill workers. We show that AI reduces the skill premium as long as it is more substitutable for high-skill workers than low-skill workers are for high-skill workers.

Originalsprache	Englisch
Seiten (von - bis)	107401
Fachzeitschrift	Finance Research Letters
Jahrgang	81
DOIs	https://doi.org/10.1016/j.frl.2025.107401
Publikationsstatus	Veröffentlicht - 2025

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