Artificial intelligence and the skill premium
- URL: http://arxiv.org/abs/2311.09255v1
- Date: Tue, 14 Nov 2023 20:16:55 GMT
- Title: Artificial intelligence and the skill premium
- Abstract summary: We develop a nested constant elasticity of substitution production function that distinguishes between industrial robots and AI.
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.
- Score: 0.0
- License: http://creativecommons.org/licenses/by/4.0/
- 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.
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