Working Paper: NBER ID: w25682
Authors: Daron Acemoglu; Pascual Restrepo
Abstract: Artificial Intelligence is set to influence every aspect of our lives, not least the way production is organized. AI, as a technology platform, can automate tasks previously performed by labor or create new tasks and activities in which humans can be productively employed. Recent technological change has been biased towards automation, with insufficient focus on creating new tasks where labor can be productively employed. The consequences of this choice have been stagnating labor demand, declining labor share in national income, rising inequality and lower productivity growth. The current tendency is to develop AI in the direction of further automation, but this might mean missing out on the promise of the "right" kind of AI with better economic and social outcomes.
Keywords: Artificial Intelligence; Labor Demand; Automation; Inequality; Productivity
JEL Codes: J23; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Automation technologies (O31) | Reduced labor demand (J23) |
| Automation technologies (O31) | Decrease in labor share in value added (E25) |
| Current trajectory of AI development (O39) | Stagnating labor demand (J29) |
| Lack of new labor-intensive tasks (J29) | Rising inequality (D31) |
| Focus on creating new tasks (L26) | Improved productivity (O49) |
| Focus on creating new tasks (L26) | Greater labor demand (J23) |
| Productivity gains from automation (O49) | Greater demand for labor in non-automated tasks (J29) |