The expansion of AI will likely shrink earnings inequality

In my second Vox EU column, written with David Bloom, Klaus Prettner, and Mario Veruete, you will learn about how AI may affect the wage skill premium:

https://cepr.org/voxeu/columns/expansion-ai-will-likely-shrink-earnings-inequality

The 1980s and 1990s saw a sharp increase in earnings inequality in the US. As new technologies displaced the routine tasks typically performed by less-educated workers, more-educated workers experienced an upturn in their economic position that has endured ever since. This column argues that artificial intelligence could mitigate or even reverse this disparity between low and highly skilled workers. Because AI is designed to substitute for non-routine tasks, it has the potential to exert downward pressure on the wages of highly skilled workers and the skills premium more broadly.

You can find the NBER version, the abstract, the keywords and the online appendix in an older post:

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