European Business Schools Librarian's Group
Department of Economics Working Papers,
Vienna University of Economics and Business, Department of Economics
No 353: 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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