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Artificial intelligence and labor markets: evidence from google trends

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  • Hakan Yilmazkuday

    (Florida International University)

Abstract

This paper investigates the effects of artificial intelligence on the labor markets of US states. The empirical analysis is based on the local projections method, where weekly state-level labor market conditions and Google search trends of "artificial intelligence" as a field of study are used. Robust to the consideration of state fixed effects and time fixed effects, the empirical results based on cumulative impulse responses show that positive shocks to "artificial intelligence" search trends deteriorate state-level labor market conditions for up to one month (consistent with the displacement effect), whereas they start improving state-level labor market conditions after six months (consistent with the productivity effect). Regarding the magnitudes, one standard deviation of a shock to state-level "artificial intelligence" search trends deteriorates (improves) state-level labor market conditions that corresponds to about $$0.01\%$$ of a reduction ( $$0.36\%$$ of an increase) in the state-level annual growth rate of real gross domestic product in cumulative terms after one month (year). Important policy suggestions follow.

Suggested Citation

  • Hakan Yilmazkuday, 2025. "Artificial intelligence and labor markets: evidence from google trends," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 49(4), pages 1078-1093, December.
    • Handle: RePEc:spr:jecfin:v:49:y:2025:i:4:d:10.1007_s12197-025-09732-y
    DOI: 10.1007/s12197-025-09732-y
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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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