AI and Jobs: the role of demand
Artificial intelligence (AI) technologies will automate many jobs, but the effect on employment is not obvious. In manufacturing, technology has sharply reduced jobs in recent decades. But before that, for over a century, employment grew, even in industries experiencing rapid technological change. What changed? Demand was highly elastic at first and then became inelastic. The effect of artificial intelligence on jobs will similarly depend critically on the nature of demand. This paper presents a simple model of demand that accurately predicts the rise and fall of employment in the textile, steel and automotive industries. This model provides a useful framework for exploring how AI is likely to affect jobs over the next 10 or 20 years.
Thanks for comments on related work by David Autor, Martin Fleming, Ricardo Hausman, Mike Meurer, Joel Mokyr, Bob Rowthorn, Anna Salomons and participants at the CID seminar at Harvard. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.
Artificial Intelligence and Jobs: The Role of Demand, James Bessen. in The Economics of Artificial Intelligence: An Agenda, Agrawal, Gans, and Goldfarb. 2019