NEW WORKING PAPER: 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 substituable for high-skill workers than low-skill workers are for high-skill workers.
You are welcome to download, share or comment the following working paper:
- David E. Bloom, Klaus Prettner, Jamel Saadaoui, Mario Veruete (October 18, 2023), Artificial intelligence and the skill premium, BETA Working Paper 2023-37: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4607353.