Artificial intelligence and the skill premium
Theoretical Economics
2023-11-17 v1 Artificial Intelligence
Abstract
What will likely be the effect of the emergence of ChatGPT and other forms of artificial intelligence (AI) on the skill premium? To address this question, we develop a nested constant elasticity of substitution production function that distinguishes between industrial robots and AI. 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.
Cite
@article{arxiv.2311.09255,
title = {Artificial intelligence and the skill premium},
author = {David E. Bloom and Klaus Prettner and Jamel Saadaoui and Mario Veruete},
journal= {arXiv preprint arXiv:2311.09255},
year = {2023}
}
Comments
11 pages, 4 figures