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The Short-Term Effects of Generative Artificial Intelligence on Employment: Evidence from an Online Labor Market

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  • Xiang Hui
  • Oren Reshef
  • Luofeng Zhou

Abstract

Generative Artificial Intelligence (AI) holds the potential to either complement knowledge workers by increasing their productivity or substitute them entirely. We examine the short-term effects of the recent release of the large language model (LLM), ChatGPT, on the employment outcomes of freelancers on a large online platform. We find that freelancers in highly affected occupations suffer from the introduction of generative AI, experiencing reductions in both employment and earnings. We find similar effects studying the release of other image-based, generative AI models. Exploring the heterogeneity by freelancers’ employment history, we do not find evidence that high-quality service, measured by their past performance and employment, moderates the adverse effects on employment. In fact, we find suggestive evidence that top freelancers are disproportionately affected by AI. These results suggest that in the short term generative AI reduces overall demand for knowledge workers of all types, and may have the potential to narrow gaps among workers.

Suggested Citation

  • Xiang Hui & Oren Reshef & Luofeng Zhou, 2023. "The Short-Term Effects of Generative Artificial Intelligence on Employment: Evidence from an Online Labor Market," CESifo Working Paper Series 10601, CESifo.
    • Handle: RePEc:ces:ceswps:_10601
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    References listed on IDEAS

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    Cited by:

    1. Goller, Daniel & Gschwendt, Christian & Wolter, Stefan C., 2023. ""This Time It's Different" - Generative Artificial Intelligence and Occupational Choice," IZA Discussion Papers 16638, Institute of Labor Economics (IZA).

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    Keywords

    generative AI; large language model (LLM); online labor market;
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