European Business Schools Librarian's Group
Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics
Artificial intelligence and the skill premium
David E. Bloom (), Klaus Prettner (), Jamel Saadaoui () and Mario Veruete ()
Additional contact information
David E. Bloom: Harvard TH Chan School of Public Health
Klaus Prettner: Department of Economics, Vienna University of Economics and Business
Jamel Saadaoui: University of Strasbourg
Mario Veruete: Quantum DataLab
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.
Keywords: Automation, Artificial Intelligence, ChatGPT, Skill Premium, Wages, Productivity
JEL-codes: J30; O14; O15; O33 December 2023
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