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Technology and Labor Markets: Past, Present, and Future; Evidence from Two Centuries of Innovation

Author

Listed:
  • Huben Liu
  • Dimitris Papanikolaou
  • Lawrence D.W. Schmidt
  • Bryan Seegmiller

Abstract

We use recent advances in natural language processing and large language models to construct novel measures of technology exposure for workers that span almost two centuries. Combining our measures with Census data on occupation employment, we show that technological progress over the 20th century has led to economically meaningful shifts in labor demand across occupations: it has consistently increased demand for occupations with higher education requirements, occupations that pay higher wages, and occupations with a greater fraction of female workers. Using these insights and a calibrated model, we then explore different scenarios for how advances in artificial intelligence (AI) are likely to impact employment trends in the medium run. The model predicts a reversal of past trends, with AI favoring occupations that are lower-educated, lower-paid, and more male-dominated.

Suggested Citation

  • Huben Liu & Dimitris Papanikolaou & Lawrence D.W. Schmidt & Bryan Seegmiller, 2025. "Technology and Labor Markets: Past, Present, and Future; Evidence from Two Centuries of Innovation," NBER Working Papers 34386, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34386
    Note: DAE EFG LS PR
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    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
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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