Large Language Models, Small Labor Market Effects
https://bfi.uchicago.edu/wp-content/uploads/2025/04/BFI_WP_2025-56-2.pdf
"#AI chatbots have had no significant impact on earnings or recorded hours in any occupation, with confidence intervals ruling out effects larger than 1%. Modest productivity gains (average time savings of 3%), combined with weak wage pass-through, help explain these limited labor market effects.
… no evidence of differential trends over time, suggesting that the limited effects are not merely a very short-run phenomenon.
… findings challenge narratives of imminent labor market transformation due to Generative AI."
#llm #laborEconomics #wages

Remote Work, Employee Mix, and Performance
https://cevatgirayaksoy.wordpress.com/wp-content/uploads/2025/06/w33851.pdf
"…fully remote work increased the share of women, including married women, rural and smaller-town residents. By accessing groups with traditionally lower labor-force participation, the firm was able to increase its share of graduate employees by 14% without raising #wages
…workforce productivity rose by 10%, reflecting shorter call durations for remote employees. This was facilitated by a quieter home working environment, avoiding the background noise in the office
…fully remote employees with initial in-person training saw higher long-run remote #productivity and lower #attrition rates."
#wfh #laborEconomics

A recent study analyzing the Danish labor market (2023-2024) offers some insights into the early impact of generative AI. While AI chatbots have seen rapid adoption across various occupations, the study suggests their effects on overall wages and employment have been remarkably limited so far.

Key takeaways from the research:
Despite widespread use, AI chatbots showed no significant impact on earnings or recorded hours.
While AI saves time for many users, the study found that new tasks created by AI (like reviewing AI output or crafting prompts) often offset these time savings for 8.4% of workers.
Only a small fraction (3-7%) of productivity gains translated into higher earnings for workers, raising questions about who benefits most from efficiency.

This early look provides perspective, challenging some narratives around immediate, widespread labor market transformation. It highlights that the integration of AI is still evolving and its long-term economic impact remains a dynamic area for further research. What are your observations on AI's impact in your workplace?
https://arstechnica.com/ai/2025/05/time-saved-by-ai-offset-by-new-work-created-study-suggests/
#GenerativeAI #LaborEconomics #AIImpact #WorkplaceInnovation #FutureOfWork

Behavioral Measures Improve AI Hiring: A Field Experiment https://d.repec.org/n?u=RePEc:rco:dpaper:532&r=&r=ain
"… suggest that survey-based behavioral measures markedly improve the predictions of a random-forest algorithm trained to predict productivity within sample relative to demographic information alone."

It's a pity that the authors do not give the more traditional probit model as much attention as their fancy "#AI", a random forrest model. They spend a lot of effort to find a good random forrest model with cross validation. But it is pitted against a simple probit model where they didn't even try to include interaction effects according to their description. Now, what is the computational cost of the cross validated random forrest model compared to a well crafted probit model? Of course you can do automated feature and feature interteraction selection with probit models, too. There is no reason to dismiss the probit model in such an unfair comparison.
#jobtech #LaborEconomics #ML

Who Gets the Callback? Generative AI and Gender Bias https://d.repec.org/n?u=RePEc:arx:papers:2504.21400&r=&r=lma
"… most #llm models reproduce stereotypical gender associations and systematically recommend equally qualified women for lower-wage roles, indicating occupational segregation.
… These biases stem from entrenched gender patterns in the training data as well as from an agreeableness bias induced during the reinforcement learning from human feedback stage
.…AI-driven hiring may perpetuate biases in the labor market and have implications for #fairness and diversity within firms"
#AI #jobtech #ExperimentalEcon #LaborEconomics #discrimination #bias

Time saved by #AI offset by new work created https://arstechnica.com/ai/2025/05/time-saved-by-ai-offset-by-new-work-created-study-suggests/
"Despite finding widespread and often employer-encouraged adoption of these tools, the study concluded that “AI chatbots have had no significant impact on earnings or recorded hours in any occupation” during the period studied. The confidence intervals in their statistical analysis ruled out average effects larger than 1%."
https://papers.ssrn.com/sol3/Delivery.cfm/5219933.pdf?abstractid=5219933&mirid=1
#economics #LaborEconomics

Job - Alert

IFO POSTDOCTORAL RESEARCHER / ECONOMIST (F/M/D): PUBLIC / BEHAVIORAL / LABOR ECONOMICS

Deadline: 2025-04-10
Location: Germany, Fürth, Bayern

https://www.academiceurope.com/job/?id=7249

Half-Past Four is the New Five O’Clock in More Efficient Workday
https://archive.ph/PNdyP
The average American workday now ends 42 minutes earlier than two years ago. Despite the shorter workday, overall productivity has increased by about 2%.
#laborEconomics #work

Macroeconomic Impact of Artificial Intelligence on Productivity: An estimate from a survey https://d.repec.org/n?u=RePEc:eti:dpaper:24084&r=&r=ain
"… highly educated and high-wage workers are more likely to use #AI
… the diffusion of AI may widen overall labor market inequality
… estimate that macroeconomic productivity impact is 0.5–0.6% when AI is used than when it is not.
… as approximately 28% of the respondents expect to use AI for their jobs in the future, the macroeconomic effects of AI are likely to expand. However, because the productivity gain of AI for those who have recently started using AI is smaller than that for those who have been using AI continuously, the additional productivity gain is likely to diminish over time."
#economics #LaborEconomics

Estimating Wage Disparities Using Foundation Model https://www.gsb.stanford.edu/gsb-box/route-download/625707
"… classic problem from #laborEconomics: estimating how individuals with the same labor market experience get paid when they belong to different groups. We highlighted the promise of using a foundation model in this setting: wage predictions improve over econometric baselines by 15%. We also showed that an omitted variable bias arises when a foundation model discards relevant information about group differences."
#llm

Job - Alert

TWO PHD STUDENTS (F/M/D) (75%)

Deadline: 2024-12-15

Location: Germany, München, Bayern

Apply: https://www.academiceurope.com/job/?id=6069

via @ckrafftc
Research in Labor Economics (RLE) is planning a volume highlighting research on New Developments in Labor Economics. The editors Solomon Polachek and @ben_elsner are soliciting up to ten new papers showcasing new developments in #laborEconomics.
https://legacy.iza.org/rle_application/formApplication

New research reveals that longer #NoticePeriods help workers find better jobs and reduce #unemployment spells. Thus long-term production gains outweigh short-term #Productivity losses. In contrast, larger severance delays job finding and has no impact on wages. #LaborMarket #LaborEconomics

https://academic.oup.com/qje/advance-article/doi/10.1093/qje/qjae029/7810272

New research shows that #inflation affects workers' #wellbeing beyond its impact on real #wages . As prices rise, #workers must fight for raises, creating #ConflictCosts that more than double inflation's effect on their well-being. #LaborEconomics #FutureOfWork
https://www.nber.org/papers/w32956

Unlocking NACE Classification Embeddings with OpenAI for Enhanced Analysis and Processing https://arxiv.org/pdf/2409.11524
"…proposes a methodology for transforming a qualitative classification, such as the NACE classification, into a numerical representation while retaining the original structure, along with methods to evaluate the efficacy of such a transformation."
#llm #LaborEconomics

"… the gender pay convergence at labor-market entry stems from younger men's larger positional losses in the wage distribution"
#gpg #LaborEconomics

#CfP
How is #EUIntegration reshaping work in #SoutheasternEurope? We're looking for papers on #labor market reforms, skills & education, labor mobility and technology transfer for a special issue of our open access journal #COMPSEES.
Deadline: July 1, 2024
 https://leibniz-ios.de/en/knowledge-transfer/news/newsdetail/cfp-compsees-sonderausgabe
#Economics #LaborEconomics #Histodons #SocialScience #SocialSciences

From rules to forests: rule-based versus statistical models for jobseeker profiling https://osf.io/preprints/socarxiv/c7ps3
"…statistical models outperform the current rule-based profiling approach predicting long-term unemployment considerably both in terms of discrimination (ROC-AUC: 0.735 vs. 0.593) and in terms of calibration (ICI: 0.037 vs. 0.223).
…machine learning methods achieve higher performance scores than conventional #regression models, especially regarding calibration."
#ML #LaborEconomics

The Bureau of Labor Statistics is reducing the sample size of the household survey in the monthly jobs report due to budget constraints https://www.bloomberg.com/news/articles/2024-06-07/us-jobs-household-survey-size-to-be-cut-amid-budget-constraints
First the labor data quality in the UK went downhill, and now the US may be on the same trajectory.
#LaborEconomics

Has Worker Pay Kept Up with Productivity Growth? https://conversableeconomist.com/2024/05/31/has-worker-pay-kept-up-with-productivity-growth/
"… productivity differences have occurred unequally… –between industries, between firms in a given industry, and even within individual firms–and so even if average #wages track average productivity, the distribution of both #productivity and wages has become more unequal"
#LaborMarkets #LaborEconomics