How Scary is the Risk of Automation? Evidence from a Large Survey Experiment

Advances in technology have always reshaped labor markets, increasing demand for highly skilled workers and automating human labor in many areas, leading to job creation but also losses. However, emerging AI innovations like ChatGPT may reduce labor demand in occupations previously considered "safe" from automation. While initial studies suggest that individuals adjust their educational and career choices to mitigate automation risk, the subjective monetary value of reduced automation risk is unknown. This study quantifies this value by assessing individuals' preferences for occupations for a hypothetical child in a discrete-choice experiment with almost 6'000 participants. The results show that survey respondents' willingness to accept lower wages for an occupation with a lower exposure to automation of 10 percentage points is substantial and amounts to almost 20 percent of an annual gross wage. Although the preferences are quite homogeneous, there are still some significant differences in willingness to pay between groups, with men, younger people, those with higher levels of education, and those with a higher risk tolerance showing a lower willingness to pay.