The Occupational Impact of Artificial Intelligence: Labor, Skills, and Polarization

Article Source: NYU Stern School of Business
Publication Date:
Time to Read: 2 minute read
Written By:

 Manav  Raj

Manav Raj



A new impact study may be used to measure the effect of progress in artificial intelligence (AI) on specific occupations. Since 2010, progress in AI has had the greatest effect on high-income occupations.


Policy Relevance:

AI may increase inequality between high-income and low-income occupations.


Key Takeaways:
  • AI might spur economic growth, but many commentators are concerned that AI will replace human labor.
  • A measure called the AI Occupational Impact (AIOI) can be used to assess improvement in different types of AI applications (image recognition or translation, for example) and to study how those trends will affect employment and wages in specific occupations.
  • Beginning in 2010, white-collar occupations that require advanced degrees, such as civil engineers, score highest on the AIOI; progress in AI is associated with higher wages and employment in these occupations.
  • Non-office jobs requiring a high degree of physical effort, such as fitness trainers or brick-masons, scored the lowest; progress in AI had little meaningful effect on low or middle-income occupations.
  • Commentators predict that truck drivers and taxi drivers will be disrupted by AI, but so far, these occupations have not been greatly affected; however, the AIOI focusses on AI, as distinct from robotics.
  • In the short run, AI will often complement rather than substitute for human labor; because AI has a more positive impact on high-income occupations than on low and middle-income, it may exacerbate income inequality and labor market polarization.
  • On average, occupations impacted by AI experience a small but positive change in wages, but no change in employment.



Edward Felten

About Edward Felten

Professor Edward Felten's research interests include computer security and privacy, and public policy issues relating to information technology. Specific topics include software security, Internet security, electronic voting, cybersecurity policy, technology for government transparency, network neutrality and Internet policy.

Rob Seamans

About Rob Seamans

Robert Seamans is an Associate Professor at New York University’s Stern School of Business where he teaches courses in game theory and strategy. Professor Seamans’ research focuses on how firms use technology in their strategic interactions with each other, and also focuses on the economic consequences of AI, robotics and other advanced technologies.