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Generative AI and labour productivity: A quasi experiment on coding

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  • Gambacorta, Leonardo
  • Qiu, Han
  • Shan, Shuo
  • Rees, Daniel M.

Abstract

This paper examines the impact of generative artificial intelligence (Gen AI) on labour productivity through a quasi-experiment involving software developers. In September 2023, Ant Group introduced CodeFuse, a large language model (LLM) designed to support coding tasks. While some programmer teams began using CodeFuse, others were not made aware of its release. Exploiting this natural variation in exposure, we identify comparable treatment and control groups of programmers to estimate the causal effect of Gen AI adoption on productivity. We find that the use of CodeFuse increases code output by over 50%. However, these productivity gains are statistically significant only among junior or entry-level staff; the impact on more senior developers is more limited. Importantly, most of the productivity gains stem not from the direct use of LLM-generated code, but from time savings that allow programmers to work more efficiently. Recognising that LLMs can inflate code volume, we assess robustness using alternative, task-based productivity measures and find a 22% increase in tasks completed. An ex-post survey of programmers supports these findings.

Suggested Citation

  • Gambacorta, Leonardo & Qiu, Han & Shan, Shuo & Rees, Daniel M., 2026. "Generative AI and labour productivity: A quasi experiment on coding," Journal of Financial Stability, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:finsta:v:84:y:2026:i:c:s1572308926000458
    DOI: 10.1016/j.jfs.2026.101543
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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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