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Still Waters, Rapid Currents: Early Labor Market Transformation under Generative AI

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Listed:
  • Anders Humlum
  • Emilie Vestergaard

Abstract

We study the early labor market impacts of AI chatbots by linking large-scale adoption surveys to administrative labor market records in Denmark. We document rapid currents: most employers in exposed occupations have adopted chatbot initiatives, workers report productivity benefits, and new AI-related tasks are widespread. Yet these currents have not broken the surface: using difference-indifferences, we estimate precise null effects on earnings and recorded hours at both the worker and workplace levels, ruling out effects larger than 2% two years after the launch of ChatGPT. What moves is the structure of work: employers absorb AI through task reorganization—including new tasks in content generation, AI oversight, and AI integration—and adopters transition into higher-paying occupations where AI chatbots are more relevant, though still too few to move average earnings. Technological change reshapes work well before it surfaces in earnings or hours.

Suggested Citation

  • Anders Humlum & Emilie Vestergaard, 2025. "Still Waters, Rapid Currents: Early Labor Market Transformation under Generative AI," NBER Working Papers 33777, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33777
    Note: LS PR
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    Citations

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    Cited by:

    1. Simone Vannuccini, 2025. "Move fast and integrate things: The making of a European Industrial Policy for Artificial Intelligence," MIOIR Working Paper Series 2025-02, The Manchester Institute of Innovation Research (MIoIR), The University of Manchester.
    2. Jacob Dominski & Yong Suk Lee, 2025. "Advancing AI Capabilities and Evolving Labor Outcomes," Papers 2507.08244, arXiv.org.
    3. Ali Ansari & Mark Esposito & Ava Fitoussy & Liu Zhang, 2026. "No Last Mile: A Theory of the Human Data Market," Papers 2603.00932, arXiv.org.
    4. Alex Farach & Alexia Cambon & Jared Spataro, 2025. "Evolving the Productivity Equation: Should Digital Labor Be Considered a New Factor of Production?," Papers 2505.09408, arXiv.org.
    5. Manuel A. Hidalgo-Pérez, 2026. "The AI-Driven Skill Premium: A Model of Positional Scarcity and Cognitive Traps," Working Papers 26.01, Universidad Pablo de Olavide, Department of Economics.
    6. Anais Galdin & Jesse Silbert, 2025. "Making Talk Cheap: Generative AI and Labor Market Signaling," Papers 2511.08785, arXiv.org.
    7. Lu Fang & Zhe Yuan & Kaifu Zhang & Dante Donati & Miklos Sarvary, 2025. "Generative AI and Firm Productivity: Field Experiments in Online Retail," Papers 2510.12049, arXiv.org, revised Feb 2026.
    8. Liu, Yan & Wang, He & Yu, Shu, 2025. "Labor Demand in the Age of Generative AI : Early Evidence from the U.S. Job Posting Data," Policy Research Working Paper Series 11263, The World Bank.
    9. Xienan Cheng & Mustafa Dogan & Pinar Yildirim, 2025. "Artificial Intelligence in Team Dynamics: Who Gets Replaced and Why?," Papers 2506.12337, arXiv.org, revised Mar 2026.
    10. Lodefalk, Magnus & Löthman, Lydia & Koch, Michael & Engberg, Erik, 2026. "Same Storm, Different Boats: Generative AI and the Age Gradient in Hiring," Working Papers 2026:2, Örebro University, School of Business.
    11. Lodefalk, Magnus & Löthman, Lydia & Koch, Michael & Engberg, Erik, 2026. "Same Storm, Different Boats: Generative AI and the Age Gradient in Hiring," Ratio Working Papers 388, The Ratio Institute.
    12. Sharique Hasan & Alexander Oettl & Sampsa Samila, 2025. "From Model Design to Organizational Design: Complexity Redistribution and Trade-Offs in Generative AI," Papers 2506.22440, arXiv.org.
    13. Andrew Johnston & Christos A. Makridis, 2026. "AI, Output, and Employment," CESifo Working Paper Series 12579, CESifo.
    14. repec:ces:ceswps:_12201 is not listed on IDEAS
    15. Thao Trang Nguyen & Giacomo Domini & Marco Grazzi & Daniele Moschella & Tania Treibich, 2025. "Automation and the Margins of Export Performance: Evidence from French Firms," LEM Papers Series 2025/37, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    16. Kauhanen, Antti & Rouvinen, Petri, 2026. "AI Has Not Impacted the Youth Labor Market in Finland," ETLA Working Papers 135, The Research Institute of the Finnish Economy.

    More about this item

    JEL classification:

    • 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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