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AI in Demand: How Expertise Shapes its (Early) Impact on Workers

Author

Listed:
  • Storm, Eduard

    (Institute for Advanced Studies (IHS) and RWI – Leibniz Institute for Economic Research)

  • Gonschor, Myrielle

    (Kienbaum Consultants)

  • Schmidt, Marc Justin

    (TU Dortmund, RTG 2484)

Abstract

We study how artificial intelligence (AI) affects workers’ earnings and employment stability, combining German job vacancy data with administrative records from 2017–2023. Identification comes from changes in workers’ exposure to local AI skill demand over time, instrumented with national demand trends. We find no meaningful displacement or productivity effects on average, but notable skill heterogeneity: expert workers with deep domain knowledge gain while non-experts often lose, with returns shaped by occupational task structures. We also document AI-driven reinstatement effects toward analytic and interactive tasks that raise earnings. Overall, our results imply distributional concerns but also job-augmenting potential of early AI technologies.

Suggested Citation

  • Storm, Eduard & Gonschor, Myrielle & Schmidt, Marc Justin, 2025. "AI in Demand: How Expertise Shapes its (Early) Impact on Workers," IHS Working Paper Series 61, Institute for Advanced Studies.
    • Handle: RePEc:ihs:ihswps:number61
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    File URL: https://irihs.ihs.ac.at/id/eprint/7345
    File Function: First version, 2025
    Download Restriction: no
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    Keywords

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    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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