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Large Language Models, Small Labor Market Effects

Author

Listed:
  • Anders Humlum
  • Emilie Vestergaard

Abstract

We examine the early labor market impacts of AI chatbots by linking large-scale, representative adoption surveys to administrative labor records in Denmark. Using difference-in-differences, 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. These null results hold for intensive users, early adopters, workplaces with substantial investments, workers reporting large gains, flexible-pay occupations, and early-career jobs. Adoption is linked to occupational switching and task restructuring, but without net changes in hours or earnings. Our findings challenge narratives of imminent disruption from Generative AI.

Suggested Citation

  • Anders Humlum & Emilie Vestergaard, 2025. "Large Language Models, Small Labor Market Effects," 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," GREDEG Working Papers 2025-21, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    2. Jacob Dominski & Yong Suk Lee, 2025. "Advancing AI Capabilities and Evolving Labor Outcomes," Papers 2507.08244, arXiv.org.
    3. 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.
    4. Anais Galdin & Jesse Silbert, 2025. "Making Talk Cheap: Generative AI and Labor Market Signaling," Papers 2511.08785, arXiv.org.
    5. 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 Oct 2025.
    6. 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.
    7. Xienan Cheng & Mustafa Dogan & Pinar Yildirim, 2025. "Artificial Intelligence in Team Dynamics: Who Gets Replaced and Why?," Papers 2506.12337, arXiv.org.
    8. 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.
    9. Lu Fang & Zhe Yuan & Kaifu Zhang & Dante Donati & Miklos Sarvary, 2025. "Generative AI and Firm Productivity: Field Experiments in Online Retail," CESifo Working Paper Series 12201, CESifo.

    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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